Financial Planning and Asset Allocation Quiz

What is a core principle of good financial planning?

• Avoiding any form of investment

• Investing only in stocks

• Having an asset allocation suited for your age and risk tolerance

• Saving all your money in a savings account

Which type of investor is likely to have a portfolio heavily weighted in stocks?

• Retired investors

• Riskier investors

• Conservative investors

• Moderate investors

What is a characteristic of a moderate investor?

• Avoiding all risks

• Investing only in bonds

• Seeking high returns with high risk

• Balancing growth with some risk tolerance

What does the rule of 100 suggest for a 40-year-old's portfolio?

• 60% in stocks and 40% in bonds

• 100% in bonds

• 100% in stocks

• 40% in stocks and 60% in bonds

In your 20s, what is the recommended asset allocation for a riskier investor?

• 100% in stocks

• 50% in stocks and 50% in bonds

• 100% in bonds

• 70% in stocks and 30% in bonds

What is a suggested asset allocation for a moderate investor in their 30s?

• 50% in stocks and 50% in bonds

• 85% in stocks and 15% in bonds

• 100% in stocks

• 100% in bonds

Why might a conservative investor prefer bonds?

• Bonds have higher returns than stocks

• Bonds are more volatile than stocks

• Bonds are riskier than stocks

• Bonds typically outperform stocks in market turmoil

What is a key consideration for asset allocation in your 50s?

• Maximizing risk for high returns

• Avoiding all forms of investment

• Focusing on capital preservation

• Investing only in real estate

What is the typical asset allocation for a conservative investor in their 60s?

• 75% in stocks and 25% in bonds

• 100% in stocks

• 60% in stocks and 40% in bonds

• 40% in stocks and 60% in bonds

What is the safe withdrawal rate assumption for retirees?

• 6% per year

• 4% per year

• 8% per year

• 2% per year