Question

Question 1

An employee is 38 years old and has had a retirement account for 13 years, with about 29 years to go before retirement. Which breakdown of investments would a financial advisor most likely suggest for the employee at this point in time?

0% high-risk; 10% medium-risk; 90% low-risk
10% high-risk; 20% medium-risk; 70% low-risk
30% high-risk; 45% medium-risk; 25% low-risk
70% high-risk; 25% medium risk; 5% low-risk

Answer 1

Answer: C- 30% high-risk; 45% medium-risk; 25% low-risk

Step-by-step explanation: The person above me was correct!!

Answer 2

A financial advisor would most likely suggest a breakdown of investments that is more aggressive at this point in time, given that the employee has a longer time horizon until retirement.

Option (c) 30% high-risk; 45% medium-risk; 25% low-risk, would be a more suitable investment breakdown for this employee. This allocation provides a higher exposure to equities or stocks (high-risk and medium-risk investments) which have historically generated higher returns over the long-term compared to bonds and cash (low-risk investments). Additionally, with 29 years left until retirement, the employee has more time to ride out any short-term fluctuations in the market.

Therefore, the option (c) 30% high-risk; 45% medium-risk; 25% low-risk would be the most suitable investment breakdown for this employee.