Risk Tolerance Assessment
Name
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First Name
Last Name
1. When do you expect to begin withdrawing money from your investment account? (choose one)
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Less than 2 years
2 years
3-4 years
5-7 years
8-10 years
More than 10 years
2. Once you begin withdrawing money from your investment account, how long do you expect the withdrawals to last?
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I plan to take a lump sum distribution
1-4 years
5-7 years
8-10 years
More than 10 years
3. Which of the following choices best reflects your attitude toward inflation and risk?
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My main goal is to avoid loss, even though I may only keep pace with inflation.
My main goal is to earn slightly more than inflation, while taking on a low level or risk.
My main goal is to increase my portfolio's value. Therefore, I am willing to accept short-term losses, but I am not comfortable with extreme performance shifts that may be experienced in the most aggressive investment options.
My main goal is to maximize my portfolio value, and I am willing to take on more extreme levels of risk and performance shifts in my portfolio to do so.
4. The table above presents a hypothetical worse case loss, expected gain, and best case gain of five examples over a one-year period with an initial $100,000 investment. Which portfolio would you prefer to hold?
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Portfolio 1
Portfolio 2
Portfolio 3
Portfolio 4
Portfolio 5
5. Investing involves a trade-off between risk and return. Which statement best describes your investment goals?
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Protect the value of my account. In order to minimize the chance for loss, I am willing to accept the lower long-term returns provided by conservative investments.
Keep risk to a minimum while trying to achieve slightly higher returns than the returns provided by investments that are more conservative.
Focus more on the long-term investment returns. Long-term growth is equally as important as managing portfolio risk.
Maximize long-term investment returns. I am willing to accept large and sometimes dramatic short-term fluctuations in the value of my investments.
6. Historically, markets have experienced downturns, both short-term and prolonged, followed by market recoveries. Suppose you owned a well-diversified portfolio that fell by 20% (i.e. $1,000 initial investment would now be worth $800) over a short period, consistent with the overall market. Assuming you still have 10 years until you begin withdrawals, how would you react?
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I would not change my portfolio.
I would wait at least one year before changing to options that are more conservative.
I would wait at least three months before changing to options that are more conservative.
I would immediately change to options that are more conservative.
7. The graph above shows the hypothetical best and worst results of five sample portfolios over a one year holding period. Note that the portfolio with the highest upside also has the largest downside. Which of these portfolios would you prefer to hold?
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Portfolio A
Portfolio B
Portfolio C
Portfolio D
Portfolio E
8. I am comfortable with investments that may frequently experience large declines in value if there is a potential for higher returns. What is your view regarding this statement?
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Strongly disagree
Disagree
Somewhat agree
Agree
Strongly agree
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