Question

Ronald, a 65-year-old professional, has lost quite a bit of his invested money in the last three months. What strategy may his financial advisor

suggest?

a

Ob

Shift his portfolio to a more moderate approach.

Choose a high-risk portfolio to recover the losses.

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Ос

Invest only in international companies

Answer 1

Answer: A- shift his portfolio to a more moderate approach

Explanation:

It’s a simple strategy

Answer 2

The strategy that his financial advisor may suggest is:

Shift his portfolio to a more moderate approach.

Explanation:

The strategy that got Ronald to this position must have been a high-risk portfolio. Therefore, his adviser should convince him to pursue a more moderate approach to reduce the losses and ensure recovery. However, it is known that high-risk investments attract higher returns than moderate-risk investments. The loss exposure that Ronald has experienced lately may also be cyclical, in which case, it may be more prudent to maintain a long position, as recovery will soon be on the corner.