Ch.12 · Matching Schemes to Investor Profiles · medium

Which of the following investors has the HIGHEST risk capacity?

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EXPLANATION

Risk capacity is highest when income is stable, time horizon is long, liabilities are low, and dependants are few. The 30-year-old with stable government income, no debt, and no dependants ticks all these boxes — highest risk capacity among the options.

A.A 30-year-old government employee with a stable salary, no debt, and no dependants [✓ Correct]

B.A 58-year-old retiree with no regular income and three dependants

C.A 45-year-old business owner with irregular income and two children approaching college age

D.A 50-year-old investor who has just taken a large home loan

EXPLANATION

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