Private Wealth Management - Reading 14: Managing Individual definition, following, investor, measures, wealth

mayanfang1

Q1. Situational profiling often uses measures of wealth in determining investor risk preferences. Which of the following is the best definition for measure of wealth within a situational profiling context? The:

A)   absolute amount of wealth held.

B)   amount of wealth held in the stock market.

C)   perceived amount of wealth held.

Q2. An investor’s source of wealth is often considered important in determining attitudes towards risk taking. Which source of wealth is considered commensurate with greater risk tolerant profiles?

A)   Passively acquired sources of wealth.

B)   Actively acquired sources of wealth.

C)   Inherited sources of wealth.

Q3. Which of the following statements regarding situational profiling is FALSE?

A)   Situational profiling considers an individual's preferences, economic resources, goals, and desires.

B)   With situational profiling, the source of an investor's wealth is considered an indicator of the investor's risk tolerance.

C)   When properly used, situational profiling will provide a great degree of insight into an investor's preferences, economic situation, goals, and desires.

Q4. Sheryl Rubenstein is a stunt double in Hollywood. Her studio took out a life insurance policy on her. What method of handling risk is her studio using? Risk:

A)   reduction.

B)   avoidance.

C)   transference.

Q5. Which of the following is NOT determined using situational profiling? Investor:

A)   biases.

B)   philosophy.

C)   behavior.

mayanfang1

答案和详解如下：

Q1. Correct answer is C)         

The amount of wealth important to an investor in a situational profile is the amount of wealth perceived as large or small by the investor. If the investor perceives his amount of wealth to be large, he may be more tolerant of risk taking activities. If the amount of wealth is perceived to be small, the investor may be less tolerant of risk taking activities.

Q2. Correct answer is B)

Actively acquired sources of wealth are often associated with entrepreneurial or other risk taking activities. Individuals with actively acquired sources of wealth are often considered to have taken risk and know and understand what it means to take risks in order to create wealth.

Q3. Correct answer is C)         

Due to the extensive number of possible individual situations, situational profiling must be applied cautiously. It should be applied as only an initial step in developing an understanding of an individual’s preferences, economic situation, goals, and desires.

Q4. Correct answer is C)         

The studio is using a risk transference method by purchasing life insurance. That way, they will not bear the risk of lost income if she dies while performing a stunt. Instead, they will receive the insurance proceeds.

Q5. Correct answer is C)         

Situational profiling does not determine investor behavior, but represents an analysis of behavior in determining preferences and biases, as well as philosophy.

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