Which of the following, if true, BEST supports Amatriya’s approach to

QUESTION

Which of the following, if true, BEST supports Amatriya’s approach to augmenting the couple’s retirement savings?

A) Forbes magazine reports that economic markets indicate that the European economy is about to enter an extended period of decline.
B) Over a ten-year period, an aggressive growth-oriented portfolio usually outperforms a more conservative one.
C) Many growth stocks are issued by new businesses taking advantage of rapidly expanding consumer interests and needs.
D) The broker handling Amatriya and Tatsuya’s portfolio is experienced at picking good bets in the stock market.
E) If Amatriya puts all the money she can save in bonds and money market funds, she will have enough to fund their retirement.

ANSWER

Answer: B
Explanation: B) If the two have ten full years before retirement, then the aggressive approach is historically justified. So Choice B is correct: The two stand to profit from the risk by substantially increasing the worth of their retirement fund. Choice A reflects world market uncertainty, somewhat strengthening Tatsuya’s more conservative approach. Choice D: An experienced broker would be helpful if the couple pursued Amatriya’s agenda, but economic changes have surprised even very knowledgeable financial experts and brokers. Choice C supports growth stocks in a very general way, affirming that they are linked to trends in the market, but exactly which stocks will be most successful is difficult to predict and some can quickly go bust. Choice E, by contrast, undercuts Amatriya’s position by showing that she could accomplish her goal through an austere, but much less risky, investment strategy.