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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Portfolio Construction Process

Mr. Arjun Mehta, aged 30, has a long investment horizon, stable income and high risk tolerance for retirement saving. Which approach to asset allocation is most consistent with his profile?

A high equity weight that is gradually reduced as retirement approaches suits him. His long horizon and high risk tolerance let him ride out volatility for growth, and a glide path later protects accumulated wealth, whereas cash-like or single-asset choices give poor long-term returns.

  1. AA high equity weight, with gradual reduction as retirement nearsCorrect
  2. B100% in savings bank deposits
  3. CEntirely in short-term liquid funds
  4. DWholly in gold to avoid volatility

Explanation

A long horizon and high risk tolerance support a growth-oriented portfolio with a large equity share, which can be reduced gradually as the goal approaches to protect accumulated wealth. The other options sacrifice long-term real returns.

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