NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Introduction to Personal Financial Planning
Which of the following is an example of a client's financial goal that is best classified as a long-term goal?
Accumulating a retirement corpus due in 25 years is a long-term goal. Long-term goals have horizons well beyond five to seven years, which suits equity-oriented investing. A holiday next year, a quarterly premium and a phone replacement in six months are all short-term needs.
- ABuilding a fund for a holiday next year
- BAccumulating a retirement corpus due in 25 yearsCorrect
- CPaying the next quarter's insurance premium
- DReplacing a mobile phone in six months
Explanation
Long-term goals generally have horizons beyond about 5 to 7 years, and retirement 25 years away clearly qualifies. The other options fall within a year and are short-term.
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