For an Investor with a Time Horizon of Five Years

question 46

Multiple Choice

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

• A) 100 percent cash.
• B) 30 percent cash, 50 percent bonds, and 20 percent stocks.
• C) 20 percent cash, 40 percent bonds, and 40 percent stocks.
• D) 10 percent cash, 30 percent bonds, and 60 percent stocks.
• E) 100 percent bonds.

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Definitions:

Relative Frequency Distribution

A tabular summary of data showing the fraction or proportion of observations in each of several nonoverlapping categories or classes.

Fraction

A mathematical expression representing the division of one number by another, denoting part of a whole.

Total Number

The entirety or sum of amounts, quantities, or counts of items in a set.

Classes

Categories or groupings into which data points are organized for statistical analysis or presentation.