Series 7 - General Securities Representative Exam
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Your new clients, the Jacobsens, are a married couple. They are both planning to retire in the next 1 - 5 years. They have maxed out their 401K contributions at work and are in excellent financial condition. Which type of portfolio mix might you recommend for them?
50% options 50% bonds
A
70% stocks 20 % bonds 10% cash
B
55% bonds 35% stocks 10 % money market funds
C
40% bonds 20% stocks 40 % money market funds
D
Explanations
Since we have a retirement time horizon of 1 - 5 years, we can surmise that more bonds than stocks is a good weighting. This eliminates B. A includes 50% options; which is much too speculative for this scenario. D has too high of a percentage in money market funds. C is the correct weighting; more in bonds but still 35% in stocks with 1-5 years left to retirement along with 10% in money market funds