For an Investor with a Time Horizon of 12 Years

question 76

Multiple Choice

For an investor with a time horizon of 12 years and higher risk tolerance, an appropriate asset allocation strategy would be

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

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Definitions:

Expressed Agency

A relationship where the agent's authority to act on behalf of the principal is explicitly stated in a contract or agreement.

Implied Agency

A relationship formed by the actions of the parties that indicates an agency relationship, even without a formal agreement.

Apparent Agency

An agency relationship created by operation of law when one party, by her actions, causes a third party to believe someone is her agent even though that person actually has no authority to act as her agent. Also called agency by estoppel.

Ratification Agency

The process by which a principal approves and accepts the acts of their agent that were done without proper authority or beyond the scope of their authority.