Series 7 practice questioneasyCustomer Profiles — Risk Tolerance
Which of the following factors is LEAST relevant when assessing a customer's risk tolerance?
- AAge and time horizon
- BAnnual income and net worth
- CFavorite color✓ Correct answer
- DInvestment experience
Explanation
Why C — Favorite color
Risk tolerance assessment involves evaluating financial capacity and willingness to accept investment risk. Relevant factors include age, time horizon, income, net worth, liquidity needs, tax status, and investment experience. A customer's favorite color has no bearing on their ability or willingness to tolerate investment risk.
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