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A Family Will Retire in a Few Years

Question 76

Multiple Choice

A family will retire in a few years.They have a high tax bracket and are concerned about their after tax rate of return.A meeting with their financial planner reveals they are primarily focused on safety of principal and they will need a 6% to 8% average rate of return on their portfolio.They desire a diversified portfolio and liquidity is likely to be a concern due to health reasons.If you had to choose from the list below which of the following asset allocations seems to best fit this family's situation?


A) 10% money market; 50% intermediate term bonds; 40% blue chip stocks, many with high dividend yields
B) 0% money market; 60% intermediate term bonds; 40% stocks
C) 10% money market; 30% intermediate term bonds; 60% high dividend paying stocks
D) 5% money market; 35% intermediate term bonds; 60% stocks, most with low dividends

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