A 25 Year Old Individual with $10,000 Invested in an RRSP

question 46

Multiple Choice

A 25 year old individual with $10,000 invested in an RRSP and an average risk tolerance should be concerned about:

• A) taxes, and should invest 70% in equities and 30% in bonds.
• B) taxes, and should invest 30% in equities and 70% in bonds.
• C) inflation, and should invest 70% in equities and 30% in bonds.
• D) inflation, and should invest 30% in equities and 70% in bonds.
• E) taxes and inflation.

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Definitions:

Market

A conceptual or physical place where buyers and sellers convene to exchange goods, services, and information.

Economic Profit

The discrepancy between overall earnings and the aggregate of explicit and implicit expenditures.

Dynamic Change

Dynamic change refers to the continuous and possibly unpredictable changes in conditions, situations, or systems over time.

X-Inefficiency

Occurs when a firm operates at higher costs than necessary, often due to lack of competitive pressure or managerial inefficiency.