Once she has reviewed the investment objectives and constraints of each of her new clients, Ravinder arranges introduction meetings with each client. During a one-hour meeting with a self-employed client, 60-year-old James Canon, Ravinder discovers that he is newly divorced and has been ordered by the court to make a large one-time settlement to his ex-wife. In addition, his son and only child has dropped out of university and wants the money his father allocated for the son’s university education as seed capital to start his own business. The funds needed to make both of these payments are currently in the investment portfolio Ravinder manages for Canon. This portfolio is also to be used for Canon’s retirement at age 65. Based on what she learned during her meeting with Canon, Ravinder suggests he take a more aggressive investment strategy to compensate for the anticipated large withdrawals from his investment portfolio.
Q. Under what circumstances would Ravinder’s suggested investment strategy for Canon most likely meet the requirements of Standard III(C)–Suitability? If Canon:
- had a different employment status.
- has numerous other investment portfolios.
- delays funding his son for at least five years.
B is correct. Taking a more aggressive investment approach for a middle-income person who aims to retire in five years and at a time when his portfolio is being drawn on to cover court-ordered liabilities, regardless of any delay in funding his son’s seed capital, may only be appropriate if the portfolio in question represented a small portion of Canon’s overall wealth. Typically, a person’s risk tolerance decreases with age, regardless of their employment status.
可以解释一下答案吗？看不明白。。。
