Edna and Stan are both recently retired and need to reallocate their i

QUESTION

Edna and Stan are both recently retired and need to reallocate their investments. Which of the following is the best portfolio mix to meet their needs?

A) 75% growth stocks, 15% blue chip stocks, 10% bonds
B) 50% growth stocks, 45% blue chip stocks, 5% cash
C) 50% blue chip stocks, 25% bonds, 25% cash
D) 15% bonds, 85% cash
E) 60% growth stocks, 40% bonds

ANSWER

Answer: C
Explanation: C) As retirees, Edna and Stan need to invest for income. Blue-chip stocks and bonds provide regular dividends and interest. Cash assets such as money market funds or bank CDs also provide regular interest and balance some of the risk of the blue-chip stocks.