For an Investor with a Time Horizon of Eight Years

question 23

Multiple Choice

For an investor with a time horizon of eight years and higher risk tolerance, an appropriate asset allocation strategy would be

• A) 100 percent stocks.
• B) 100 percent cash.
• C) 30 percent cash, 50 percent bonds, and 20 percent stocks.
• D) 10 percent cash, 30 percent bonds, and 60 percent stocks.
• E) 100 percent bonds.

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Definitions:

Consolidation Process

The method by which a parent company combines its financial statements with those of its subsidiaries to produce a single set of financial statements representing the entire corporate group as one entity.

Reliance on a Major Customer

A situation where a significant portion of a company's revenue comes from sales to a single customer.

Entities Under Common Control

Business entities that are directly or indirectly controlled by the same party or parties, typically characterized by shared management or ownership.