The stage an individual is in his/her life cycle will affect his/her __________.

Question

Quizplus · Accepted Answer

The stage an individual is in his/her life cycle will affect all three factors: return requirements, risk tolerance, and asset allocation. A young person just starting out in their career may have a higher risk tolerance and the ability to take on more aggressive investments to maximize return. On the other hand, an individual close to retirement may have a lower risk tolerance and require more conservative investments to protect their assets. Similarly, the return requirements at different stages of life will vary depending on an individual's financial goals and obligations. Finally, asset allocation will also be affected by the stage of life, as different stages will require different types of assets to create a well-diversified portfolio.

The Stage an Individual Is in His/her Life Cycle Will