Risk Tolerance Assessment
Name
First Name
Last Name
Your Email
*
This will be used to automatically email your assessment results to you.
Please add me to the My Penny Earned newsletter distribution list.
*
Yes
No
Back
Next
How risky are you?
Consider each question, then enter the points associated with your answer in the column to the right. Total your points at the bottom and review the description associated with your score.
In general, how would your best friend describe you as a risk taker?
*
a. A real gambler
b. Willing to take risks after completing adequate research
c. Cautious
d. A real risk avoider
You are on a TV game show and can choose one of the following; which would you take?
*
a. $1,000 in cash
b. A 50% chance at winning $5,000
c. A 25% chance at winning $10,000
d. A 5% chance at winning $100,000
You have just finished saving for a “once-in-a-lifetime” vacation. Three weeks before you plan to leave, you lose your job. You would:
*
a. Cancel the vacation
b. Take a much more modest vacation
c. Go as scheduled, reasoning that you need the time to prepare for a job search
d. Extend your vacation, because this might be your last chance to go first- class
If you unexpectedly received $20,000 to invest, what would you do?
*
a. Deposit it in a bank account, money market account, or insured CD
b. Invest it in safe high-quality bonds or bond mutual funds
c. Invest it in stocks or stock mutual funds
In terms of experience, how comfortable are you investing in stocks or stock mutual funds?
*
a. Not at all comfortable
b. Somewhat comfortable
c. Very Comfortable
When you think of the word “risk,” which of the following words comes to mind first?
*
a. Loss
b. Uncertainty
c. Opportunity
d. Thrill
Suppose an expert predicts prices of assets such as gold, jewels, collectibles, and real estate (hard assets) to increase in value and bond prices may fall. However, experts tend to agree that government bonds are relatively safe. Most of your investment assets are now in high-interest government bonds. What would you do?
*
a. Hold the bonds
b. Sell the bonds, put half the proceeds into money market accounts, and the other half into hard assets
c. Sell the bonds and put the total proceeds into hard assets
d. Sell the bonds, put all the money into hard assets, and borrow additional money to buy more
Given the best and worst case returns of the four investment choices below, which would you prefer?
*
a. $200 gain best case; $0 gain/loss worst case
b. $800 gain best case, $200 loss worst case
c. $2,600 gain best case, $800 loss worst case
d. $4,800 gain best case, $2,400 loss worst case
In addition to whatever you own, you have been given $1,000. You are now asked to choose between:
*
a. A sure gain of $500
b. A 50% chance to gain $1,000 and a 50% chance to gain nothing.
In addition to whatever you own, you have been given $2,000. You are now asked to choose between:
a. A sure loss of $500
b. A 50% chance to lose $1,000 and a 50% chance to lose nothing.
Suppose a relative left you an inheritance of $100,000, stipulating in the will that you invest ALL the money in ONE of the following choices. Which one would you select?
*
a. A savings account or money market mutual fund
b. A mutual fund that owns stocks and bonds
c. A portfolio of 15 common stocks
d. Commodities like gold, silver, and oil
If you had to invest $20,000, which of the following investment choices would you find most appealing?
*
a. 60% in low-risk investments, 30% in medium-risk investments, 10% in high-risk investments
b. 30% in low-risk investments, 40% in medium-risk investments, 30% in high-risk investments
c. 10% in low-risk investments, 40% in medium-risk investments, 50% in high-risk investments
Your trusted friend and neighbor, an experienced geologist, is putting together a group of investors to fund an exploratory gold mining venture. The venture could pay back 50 to 100 times the investment if successful. If the mine is a bust, the entire investment is worthless. Your friend estimates the chance of success is only 20%. If you had the money, how much would you invest?
*
a. Nothing
b. One month’s salary
c. Three month’s salary
d. Six month’s salary
Back
Next
Your Score
Understanding Your Score
Select the Submit button below to receive an email with your score.
I know what level of risk I should take with my investments to achieve the retirement I hope for.
*
Strongly disagree
Disagree
Neither agree or disagree
Agree
Strongly agree
I would like to discuss these results with a counselor.
*
Yes
No
Are you an Alameda County employee or retiree?
*
Yes
No
Submit
For Educational Purposes Only
My Penny Earned is a retirement and financial education service of Relational Gravity, LLC. The content – including this Risk Tolerance Assessment – is for educational purposes only. You should not construe any information as retirement, financial, or investment advice. Accordingly, any decision in connection with funds, investments, or transactions must not be made solely on the information contained herein; you should consult your financial advisor before taking any action. Assessment Source: Grable, J. E., & Lytton, R. H. (1999). Financial risk tolerance revisited: The development of a risk assessment instrument. Financial Services Review, 8, 163 – 181.
Should be Empty: