Based on your assessed risk tolerance (total score of 18, see chart below) and your time horizon, what is the expected return for your retirement savings portfolio?

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} 1 2 3 4 5 6 Global Portfolio Allocation Scoring System (PASS) for Individual Investors Strongly Agree Total Questions Earning a high long-term total return that will allow my capital to grow faster than the inflation rate is one of my most important investment objects I would like an investment that provides me with an opportunity to defer taxation of capital gains to future years. I do not require a high level of current income from my investments I am willing to tolerate some sharp downs swings in the return on my investments in order to seek a potentially higher return than would normally be expected from more stable investments. I am willing to risk a short- term loss in return for a potentially higher long-run rate of return. I am financailly able to accept. a low level of liquidity in my investmnet portfolio. 18 5 5 5 5 5 5 Strongly Agree Neutral Disagree Disagree 4 4 4 4 4 4 3 3 3 3 3 3 2 2 2 2 2 2 1 1 1 1 1 1 Pass Score Cash and Money Market Fund Treasury Bonds/Band Funds Corporate Bonds /Bond Funds International Bond Funds Index Fund Large Cap Funds/Stocks Mid/Small Funds/Stocks 1 International Stock Funds 2 Real Estate Funds 3 Total 4 5 Expected Return 5 Expected Std. Dev. 7 V Short-Term Horizon 10% Intermediate-Term Horizon Long-Term Horizon RT1 RT2 RT3 RT4 RT1 RT2 RT3 RT4 RT1 RT2 RT3 RT4 Target Target Target Target Target Target Target Target Target Target Target Target 6-12 13-18 19-24 25-30 6-12 13-18 19-24 25-30 6-12 13-18 19-24 25-30 40% 30% 20% 10% 5% 5% 5% 5% 5% 5% 3% 40% 30% 30% 20% 60% 35% 20% 10% 30% 20% 12% 20% 30% 30% 40% 15% 15% 15% 10% 15% 0% 0% 0% 0% 0% 5% 5% 5% 0% 0% 10% 10% 10% 10% 15% 20% 20% 20% 0% 0% 5% 5% 10% 10% 15% 20% 25% 0% 0% 5% 0% 5% 10% 10% 0% 0% 5% 5% 10% 0% 0% 5% 5% 10% 5% 1 100% 100% 100% 100% 10% 5% 20% 20% 25% 5% 4% 20% 5% 0% 0% 0% 5% 0% 5% 5% 100% 100% 100% 0% 0% 100% 3.80 % 4.65% 2.79% 3.85 % 5.30% 6.50% 5.33% 6.78 % 4.84% 6.40% 5.13% 7.26% 7.73% 8.58% 6.93% 8.73 % 10.25% 7.75% 15% 10% 5% 10% 10% 15% 100% 100% I 2% 0% 4% 10% 20% 15% 20% 100% 7.73 % 8.51 % 9.77 % 8.94% 10.12% 12.20% } 1 2 3 4 5 6 Global Portfolio Allocation Scoring System (PASS) for Individual Investors Strongly Agree Total Questions Earning a high long-term total return that will allow my capital to grow faster than the inflation rate is one of my most important investment objects I would like an investment that provides me with an opportunity to defer taxation of capital gains to future years. I do not require a high level of current income from my investments I am willing to tolerate some sharp downs swings in the return on my investments in order to seek a potentially higher return than would normally be expected from more stable investments. I am willing to risk a short- term loss in return for a potentially higher long-run rate of return. I am financailly able to accept. a low level of liquidity in my investmnet portfolio. 18 5 5 5 5 5 5 Strongly Agree Neutral Disagree Disagree 4 4 4 4 4 4 3 3 3 3 3 3 2 2 2 2 2 2 1 1 1 1 1 1 Pass Score Cash and Money Market Fund Treasury Bonds/Band Funds Corporate Bonds /Bond Funds International Bond Funds Index Fund Large Cap Funds/Stocks Mid/Small Funds/Stocks 1 International Stock Funds 2 Real Estate Funds 3 Total 4 5 Expected Return 5 Expected Std. Dev. 7 V Short-Term Horizon 10% Intermediate-Term Horizon Long-Term Horizon RT1 RT2 RT3 RT4 RT1 RT2 RT3 RT4 RT1 RT2 RT3 RT4 Target Target Target Target Target Target Target Target Target Target Target Target 6-12 13-18 19-24 25-30 6-12 13-18 19-24 25-30 6-12 13-18 19-24 25-30 40% 30% 20% 10% 5% 5% 5% 5% 5% 5% 3% 40% 30% 30% 20% 60% 35% 20% 10% 30% 20% 12% 20% 30% 30% 40% 15% 15% 15% 10% 15% 0% 0% 0% 0% 0% 5% 5% 5% 0% 0% 10% 10% 10% 10% 15% 20% 20% 20% 0% 0% 5% 5% 10% 10% 15% 20% 25% 0% 0% 5% 0% 5% 10% 10% 0% 0% 5% 5% 10% 0% 0% 5% 5% 10% 5% 1 100% 100% 100% 100% 10% 5% 20% 20% 25% 5% 4% 20% 5% 0% 0% 0% 5% 0% 5% 5% 100% 100% 100% 0% 0% 100% 3.80 % 4.65% 2.79% 3.85 % 5.30% 6.50% 5.33% 6.78 % 4.84% 6.40% 5.13% 7.26% 7.73% 8.58% 6.93% 8.73 % 10.25% 7.75% 15% 10% 5% 10% 10% 15% 100% 100% I 2% 0% 4% 10% 20% 15% 20% 100% 7.73 % 8.51 % 9.77 % 8.94% 10.12% 12.20%

Answer rating: 100% (QA)

Hence based on your assess... View the full answer