For an investor with a time horizon of 6 to 10 years and higher risk tolerance, an appropriate asset allocation strategy would be
A) 100% stocks
B) 100% cash
C) 30% cash, 50% bonds, and 20% stocks
D) 10% cash, 30% bonds, and 60% stocks
E) 100% bonds

Question

Quizplus · Accepted Answer

An investor with a time horizon of 6 to 10 years and higher risk tolerance can afford to have a higher allocation to stocks as compared to cash or bonds. The asset allocation strategy that best fits this profile is option D, with 60% allocation to stocks, 30% to bonds, and 10% to cash. This allocation provides the potential for growth through stocks while also limiting the downside risk through allocations to bonds and cash.

For an Investor with a Time Horizon of 6 to 10