Q1. In general, an individual facing retirement has a greater amount of: A) financial capital than human capital. B) human capital than financial capital. C) both human and financial capital than when they first started working.
Q2. A salesman is paid by his employer by the commission of his sales only. He has noticed that in the last couple years, the amount of his sales has been closely correlated with the U.S. market. The salesman should: A) weight his financial portfolio more so in risky assets. B) weight his financial portfolio more so in low risk, fixed income assets. C) have no preference for how his financial portfolio is weighted.
Q3. With regards to an individual’s total wealth, which statement is most accurate? If an individual’s human capital is fixed income-like their financial portfolio: A) should be weighted with similar non-risky fixed income assets. B) should be weighted in no specific way that is related to their human capital. C) may be weighted more heavily towards risky assets.
Q4. Which of the following statements regarding human capital is most accurate? A) A person’s human capital is highest when they are born and trends downward after that. B) A person’s human capital is zero at retirement. C) For a young investor their human capital is equivalent to a large holding of an illiquid asset.
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