A 55-year-old client, Sarah, plans to retire in 10 years. She has a stable government pension that will cover her basic living expenses and a $500,000 investment portfolio. She expresses discomfort with market volatility and has a clear preference for preserving capital over aggressive growth. What is the most appropriate risk profile for Sarah?

Question: A 55-year-old client, Sarah, plans to retire in 10 years. She has a stable government pension that will cover her basic living expenses and a $500,000 investment portfolio. She expresses discomfort with market volatility and has a clear preference for preserving capital over aggressive growth. What is the most appropriate risk profile for Sarah?

Answer options: ✅ Conservative

• Moderate Conservative
• Moderate Growth
• Aggressive Growth

Correct answer: Conservative

Explanation: Sarah's clear preference for capital preservation, discomfort with volatility, and sufficient pension to cover basic expenses, despite her 10-year time horizon, strongly indicate a conservative risk profile.