CRC CRC Investment Strategies & Asset Allocation

Question 1

Which investment strategy involves gradually shifting a portfolio from growth-oriented to income-oriented assets as retirement approaches?

Accepted Answer

Glide path strategy

Answer

Tactical asset allocation

Answer

Dollar-cost averaging

Answer

Sector rotation

Question 2

What is the primary purpose of diversification in a retirement portfolio?

Accepted Answer

Reduce unsystematic risk across asset classes

Answer

Maximize short-term returns

Answer

Eliminate all investment risk

Answer

Guarantee income in retirement

Question 3

A CRC client aged 65 asks about the 'bucket strategy' for retirement income. Which description is most accurate?

Accepted Answer

Dividing assets into time-segmented pools with different risk levels

Answer

Investing only in dividend-paying stocks

Answer

Purchasing a series of Treasury bonds

Answer

Allocating 100% to a target-date fund

Question 4

Which risk refers to the danger of experiencing poor investment returns early in retirement, which can permanently deplete a portfolio?

Accepted Answer

Sequence-of-returns risk

Answer

Longevity risk

Answer

Inflation risk

Answer

Liquidity risk

Question 5

In a retirement portfolio, what does 'rebalancing' accomplish?

Accepted Answer

Restoring the portfolio to its target asset allocation

Answer

Switching all assets to bonds after market drops

Answer

Eliminating underperforming funds

Answer

Increasing equity exposure during bull markets

Question 6

Which asset class is generally considered the most effective long-term hedge against inflation within a retirement portfolio?

Accepted Answer

Equities (stocks)

Answer

Cash equivalents

Answer

Long-term Treasury bonds

Answer

Fixed annuities