Risk Tolerance Assessment
Choose the response that best fits your personality. There is no "right" or "wrong" answer.
1. How would your best friend of family describe you as a risk taker?
Risk taker, after thorough research
Avoid risk at all cost
2. You won a contest! Which prize do you pick?
50% chance of winning $5,000
25% chance of winning $10,000
5% chance of winning $100,000
3. You've reached your goal of saving for a fabulous trip but you lose your job. Would you:
Cancel your trip
Reduce the scale of the trip to a more modest vacation
Go! After all, you need a break and to prepare for a new job
Extend the trip because it might be a while before you can get another fabulous trip
4. You unexpectedly receive $25,000. How do you proceed?
Deposit all $25k into an insured account like savings, money market or certificate of deposit
Invest in safe, conservative high quality bonds or bond funds
Invest in stocks or stock funds
5. How comfortable are you investing in stocks or stock mutual funds based on your own experience?
Not at all
6. You hear the word "risk". What comes to mind first?
7. Experts predict prices of hard assets such as gold, jewels, collectibles and real estate will increase in value. Bond prices may fall, however most experts agree government bonds are relatively safe. Most of your investment assets are currently in high interest government bonds. What action would you take?
Hold on to the bonds
Sell all bonds; put half of proceeds in a money market account and half in hard assets
Sell all bonds; put all proceeds in hard assets
Sell all bonds; put all proceeds in hard assets, borrow money to buy more
8. Given the below best/worst case returns of four investment scenarios, which would you choose?
$250 gain / $0 gain or loss
$1,000 gain / $250 loss
$2,500 gain / $825 loss
$5,000 gain / $2,500 loss
9. In addition to your current holdings, you have received an additional $1,000. You must choose one of the following, which would you do?
A guaranteed gain of $500
A 50% change to gain $1,000 and a 50% chance to gain nothing
10. In addition to your current holdings, you have received an additional $2,000. You must choose one of the following, which would you do?
A guaranteed loss $500
A 50% chance to lose $1,000 and a 50% chance to lose nothing
11. Your favorite uncle left you an inheritance of $150,000 requiring you to invest the total in one of the following pre-selected offerings. Which do you choose?
Savings or money market account
Fund owning stocks and bonds
Portfolio of 15 common stocks
Commodities portfolio of gold, oil, and silver
12. You have to invest $50,000. Which investment selection allocation do you find most appealing?
60% low-risk, 30% medium-risk, 10% high-risk
30% low-risk, 40% medium-risk, 30% high-risk
10% low-risk, 40% medium-risk, 50% high-risk
13. Your best friend and neighbor, a successful entrepreneur, is starting a new venture and putting together a small group of investors to join first. The venture could return 50 to 100 times your initial investment. If it fails, your entire investment is gone. Your friend estimates the success rate at about 23%. IF you had the money, how much would you invest?
Nothing - not a single penny
A month's salary
Three month's salary
Six month's salary
TOTAL: Please note your score. Generally speaking, your score can be interpreted as follows: 18 or below = low risk tolerance (conservative investor), 19 - 22 = Below average risk tolerance, 23 - 28 = Average/Moderate risk tolerance, 29 -32 = Above average risk tolerance, 33 and above = High risk tolerance (aggressive investor)
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