Schweser Vol1 2AM Q1- risk tolerance long, job, anything, indicate, ability

Rasec

I’ve spent so much time on these but I just don’t get Schweser’s response on this one. For ability to take risk, they stated that the Smythes are below average but I don’t see anything that should indicate less ability? They have an income need of $116,438 on a 3.75m portfolio, which is just above 3% of the portfolio. Hubby still has a job and they have a long time horizon… what am I missing??

SeanWest

Yeah i disagreed with this answer too..
Schwesers point was that their portfolio was “required” to come up with the return on the majority of their income expenses. And because like 66% of their income need had to be yielded by the portfolio, the portfolio has to be less risky to ensure it will meet that return.
Thought the answer was shady myself.. clearly they could take some more risk.