Question 6

Risk attitude establishes the upper limit on the amount of acceptable risk.

Select one:

True

False

Question 7

Risk Perception determines how much risk a client can afford to take, or needs to take, to achieve goals.

Select one:

True

False

Question 8

Which of the following biases from behavioral finance may influence Risk Perception?

I. Availability

II. Overconfidence

III. Loss Aversion

IV. Representativeness

V. Recency

Select one:

a. I and II only

b. II, III, and IV only

c. III and IV only

d. All of the above

Question 9

"Revealed preference" is an alternative to "stated preference" as a way of uncovering client risk attitudes.

Select one:

True

False

Question 10

Revealed Preference uses psychometrically-validated questions to measure risk attitudes.

Select one:

True

False

Question 11

Research has shown which of the following factors to be significant when predicting financial risk tolerance?

I. race/ethnic group

II. age

III. education level,

IV. income and wealth,

V. employment status,

VI. financial knowledge/experience

VII marital status and family relationships

VIII market conditions and expectations.

Select one:

a. I, II, and III

b. II, III, and IV

c. III, IV, V, VI, VII, and VIII

d. All of the above

Question 12

Research has shown that younger, higher-income and higher-education individuals display greater levels of decision making ability (DMA) than older, lower-income and lower-education individuals.

Select one:

True

False