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InvestmentRiskToleranceQuiz:PersonalFinance

InvestmentRiskToleranceQuiz
Wanttoimproveyourpersonalfinances?Startbytakingthisquiztogetanideaofyourrisk
toleranceoneofthefundamentalissuestoconsiderwhenplanningyourinvestmentstrategy,
eitheraloneorinconsultationwithaprofessional.Choosetheresponsethatbestdescribesyou
thereareno"right"or"wrong"answers.Justhavefun!
Whenyou'redone,clickonthe"ViewResults"buttontoseehowyou'redoing.
Ifyouwouldliketoscoreyourself,usethisscoringgrid.
Note:Thisquizwasdevelopedbytwouniversitypersonalfinanceprofessors,Dr.Ruth
LyttonatVirginiaTechandDr.JohnGrableattheUniversityofGeorgia.Bytakingthis
quizyouwillbecontributingtoastudyonmeasuringfinancialrisktolerance.Your
resultswillberecordedanonymously.Wearenotcollectinganyidentifying
information.

InvestmentRiskToleranceQuiz
1.

Ingeneral,howwouldyourbestfrienddescribeyouasarisktaker?
Arealgambler
Willingtotakerisksaftercompletingadequateresearch
Cautious
Arealriskavoider

2.

YouareonaTVgameshowandcanchooseoneofthefollowing.Which
wouldyoutake?
$1,000incash
A50%chanceatwinning$5,000
A25%chanceatwinning$10,000
A5%chanceatwinning$100,000

3.

Youhavejustfinishedsavingfora"onceinalifetime"vacation.Threeweeks
beforeyouplantoleave,youloseyourjob.Youwould:
Cancelthevacation
Takeamuchmoremodestvacation
Goasscheduled,reasoningthatyouneedthetimetoprepareforajobsearch
Extendyourvacation,becausethismightbeyourlastchancetogofirstclass

4.

Ifyouunexpectedlyreceived$20,000toinvest,whatwouldyoudo?
Deposititinabankaccount,moneymarketaccount,oraninsuredCD
Investitinsafehighqualitybondsorbondmutualfunds
Investitinstocksorstockmutualfunds

5.

Intermsofexperience,howcomfortableareyouinvestinginstocksorstock
mutualfunds?
Notatallcomfortable
Somewhatcomfortable
Verycomfortable

6.

Whenyouthinkoftheword"risk"whichofthefollowingwordscomesto

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InvestmentRiskToleranceQuiz:PersonalFinance

mindfirst?
Loss
Uncertainty
Opportunity
Thrill
7.

Someexpertsarepredictingpricesofassetssuchasgold,jewels,
collectibles,andrealestate(hardassets)toincreaseinvaluebondprices
mayfall,however,expertstendtoagreethatgovernmentbondsare
relativelysafe.Mostofyourinvestmentassetsarenowinhighinterest
governmentbonds.Whatwouldyoudo?
Holdthebonds
Sellthebonds,puthalftheproceedsintomoneymarketaccounts,andtheotherhalfinto
hardassets
Sellthebondsandputthetotalproceedsintohardassets
Sellthebonds,putallthemoneyintohardassets,andborrowadditionalmoneytobuy
more

8.

Giventhebestandworstcasereturnsofthefourinvestmentchoicesbelow,
whichwouldyouprefer?
$200gainbestcase$0gain/lossworstcase
$800gainbestcase$200lossworstcase
$2,600gainbestcase$800lossworstcase
$4,800gainbestcase$2,400lossworstcase

9.

Inadditiontowhateveryouown,youhavebeengiven$1,000.Youarenow
askedtochoosebetween:
Asuregainof$500
A50%chancetogain$1,000anda50%chancetogainnothing

10.

Inadditiontowhateveryouown,youhavebeengiven$2,000.Youarenow
askedtochoosebetween:
Asurelossof$500
A50%chancetolose$1,000anda50%chancetolosenothing

11.

Supposearelativeleftyouaninheritanceof$100,000,stipulatinginthewill
thatyouinvestALLthemoneyinONEofthefollowingchoices.Whichone
wouldyouselect?
Asavingsaccountormoneymarketmutualfund
Amutualfundthatownsstocksandbonds
Aportfolioof15commonstocks
Commoditieslikegold,silver,andoil

12.

Ifyouhadtoinvest$20,000,whichofthefollowinginvestmentchoices
wouldyoufindmostappealing?
60%inlowriskinvestments30%inmediumriskinvestments10%inhighrisk
investments
30%inlowriskinvestments40%inmediumriskinvestments30%inhighrisk
investments
10%inlowriskinvestments40%inmediumriskinvestments50%inhighrisk
investments

13.

Yourtrustedfriendandneighbor,anexperiencedgeologist,isputting
togetheragroupofinvestorstofundanexploratorygoldminingventure.
Theventurecouldpayback50to100timestheinvestmentifsuccessful.If

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InvestmentRiskToleranceQuiz:PersonalFinance

themineisabust,theentireinvestmentisworthless.Yourfriendestimates
thechanceofsuccessisonly20%.Ifyouhadthemoney,howmuchwould
youinvest?
Nothing
Onemonth'ssalary
Threemonth'ssalary
Sixmonth'ssalary

DemographicData
14.

Whatisyourgender?
SelectOne

15.

Whatisyourcurrentageinyears?
SelectOne

16.

Whatisyourmaritalstatus?
SelectOne

17.

Whatisthehighestlevelofeducationyouhavecompleted?
SelectOne

18.

Whatisyourhousehold'sapproximateannualgrossincomebeforetaxes?
SelectOne

19.

Thinkingaboutyourcurrentfinancialsituation,approximatelywhat
percentageofyourpersonalandretirementsavingsandinvestmentsarein
thefollowingcategories?(Note:Pleasecompleteeveryboxinthissection.
Forinvestmentscategoriesthatarenotselected,placeazerointhebox.
Percentagesshouldtotal100%)
%Cash,suchassavingsaccounts,CDs,ormoneymarketmutualfunds
%Fixedincomeinvestments,suchascorporatebonds,governmentbonds,orbond
mutualfunds
%Equities,suchasstocks,stockmutualfunds,directbusinessownershiporinvestment
realestate(notyourpersonalresidence)
%Other,suchasgoldorcollectibles

20.

Whoisresponsibleforinvestmentallocationdecisionsinyourhousehold?
SelectOne
ViewResults

RiskToleranceQuizSource:Grable,J.E.,&Lytton,R.H.(1999).Financialrisktolerancerevisited:Thedevelopmentofariskassessment
instrument.FinancialServicesReview,8,163181.

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