When an investment advisor attempts to determine an investor's risk tolerance, which factor would they be least likely to assess?

Question

Quizplus · Accepted Answer

The level of return the investor prefers is likely to be an important factor in assessing their risk tolerance, as it will influence how much risk they are willing to take on in order to achieve their desired returns. Factors such as prior investing experience, degree of financial security, and tendency towards risky or conservative choices are also likely to be important in assessing risk tolerance, as they can give an indication of how comfortable the investor is with taking on different types and levels of risk. However, preference for a level of return is least likely to be the factor assessed because it may not indicate the investor's willingness to take on risk, but rather their desired outcome.

When an Investment Advisor Attempts to Determine an Investor's Risk