Certified Financial Planner (CFP) Practice Exam · Question
A younger client has a long time horizon and high-risk tolerance. Which asset allocation would generally be most appropriate?
Clients with a long time horizon and high-risk tolerance can generally afford to take on more equity risk, as they have time to recover from market downturns an
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Question: A younger client has a long time horizon and high-risk tolerance. Which asset allocation would generally be most appropriate?
Answer options:
- 100% money market funds
- 70% bonds, 30% stocks ✅ 80% stocks, 20% bonds
- 50% cash, 50% GICs
Correct answer: 80% stocks, 20% bonds
Explanation: Clients with a long time horizon and high-risk tolerance can generally afford to take on more equity risk, as they have time to recover from market downturns and benefit from higher long-term growth potential.
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