HOW MUCH FINANCIAL RISK ARE YOU WILLING TO INCUR?

(Complete this questionnaire to find out.)

FREE – Personal Financial Risk Profile that compares you to a representative sample of investors.

A crucial step in the investment management process is determining the risk tolerance of the investor(s). We need to answer the question: How much risk is the client willing to incur to achieve his/her goals?

How do we do this? We ask each spouse/partner in the household to individually complete the following questionnaire and submit it to us. We will then provide you with a Risk Profile. There is no charge or obligation on your part. We simply want to demonstrate to you one of the techniques which we use in the process of managing our clients’ portfolios.

Step 1 Provide your name, mailing address, and email address. If you are one of a couple, each person must independently submit a questionnaire in order to get the full value of the Profile Report.

Step 2 Please answer all the questions by clicking one of the options. Choose the option that best indicates how you feel about each question. If none of the options is exactly right for you, choose the option that is closest.

Step 3 Confirm that all required information has been completed and then hit the submit button at the end of the questionnaire.

We will mail your Risk Profile to you.

* First Name: * Last Name: * Email: * Address: * City: * State: * Zip Code: * Do you have a spouse/partner who will also complete a questionnaire? Yes * No *If yes, please furnish the name and email address of your spouse/partner so that your questionnaires may be evaluated together. Spouse/Partner’s Full Name: Spouse/Partner’s Email Address:

* = required

1. Compared to others, how do you rate your willingness to take financial risks?	Extremely low risk taker. Very low risk taker. Low risk taker. Average risk taker. High risk taker. Very high risk taker. Extremely high risk taker.
2. How easily do you adapt when things go wrong financially?	Very uneasily. Somewhat uneasily. Somewhat easily. Very easily.
3. When you think of the word “risk” in a financial context, which of the following words come to mind first?	Danger. Uncertainty. Opportunity. Thrill.
4. Have you ever invested a large sum in a risky investment mainly for the “thrill” of seeing whether it went up or down in value?	No. Yes, very rarely. Yes, somewhat rarely. Yes, somewhat frequently. Yes, very frequently.
5. If you had to choose between more job security with a small pay increase and less job security with a big pay increase, which would you pick?:	Definitely more job security with a small pay increase. Probably more job security with a small pay increase. Not sure. Probably less job security with a big pay increase. Definitely less job security with a big pay increase.
6. When faced with a major financial decision, are you more concerned about the possible losses or the possible gains?	Always the possible losses. Usually the possible losses. Usually the possible gains. Always the possible gains.
7. How do you usually feel about your major financial decisions after you make them?	Very pessimistic. Somewhat pessimistic. Somewhat optimistic. Very optimistic.
8. Imagine you were in a job where you could choose to be paid salary, commission or as a mix of both. Which would you pick?	All salary. Mainly salary. Equal mix of salary and commission. Mainly commission. All commission.
9. What degree of risk have you taken with your financial decisions in the past?	Very small. Small. Medium. Large. Very large.
10. What degree of risk are you currently prepared to take with your financial decisions?	Very small. Small. Medium. Large. Very large.
11. Have you ever borrowed money to make an investment (other than for your home)?	No. Yes.
12. How much confidence do you have in your ability to make good financial decisions?	None. A little. A reasonable amount. A great deal. Complete.
13. Suppose that 5 years ago you bought stock in a highly regarded company. That same year the company experienced a severe decline in sales due to poor management. The price of the stock dropped drastically and you sold at a substantial loss. The company has been restructured under new management and most experts now expect its stock to produce better than average returns. Given your bad past experience with this company, would you buy stock now?	Definitely not. Probably not. Not sure. Probably. Definitely.
14. Investments can go up and down in value and experts often say you should be prepared to weather a downturn. By how much could the total value of all your investments go down before you would begin to feel uncomfortable?	Any fall in value would make me feel uncomfortable. 10%. 20%. 33%. 50%. More than 50%.
15. Assume that a long-lost relative dies and leaves you a house which is in poor condition but is located in a suburb that’s becoming popular. As is, the house would probably sell for $300,000, but if you were to spend about $100,000 on renovations, the selling price would be around $600,000. However, there’s some talk of constructing a major highway next to the house, and this would lower its value considerably.Which of the following options would you take?	Sell it as is. Keep it as is, but rent it out. Take out a $100,000 mortgage and do the renovations.
16. Most investment portfolios have a mix of investments – some of the investments may have high expected returns but with high risk, some may have medium expected returns and medium risk, and some may be low risk/low return. (For example, stocks and real estate would be high risk/high return whereas cash and CDs (certificates of deposit) would be low risk/low return.) Which mix of investments do you find most appealing? Would you prefer all low risk/low return, all high risk/high return, or somewhere in between?Please select one of the seven portfolios listed below: Mix of Investments in Portfolio Portfolio High Risk/Return Medium Risk/Return Low Risk/Return 1 0% 0% 100% 2 0% 30% 70% 3 10% 40% 50% 4 30% 40% 30% 5 50% 40% 10% 6 70% 30% 0% 7 100% 0% 0%

17. You are considering placing one-quarter of your investment funds into a single investment. This investment is expected to earn about twice the CDs (certificates of deposit) rate. However, unlike a CD, this investment is not protected against loss of the money invested. How low would the chance of a loss have to be for you to make the investment?	Zero, i.e. no chance of any loss. Very low chance of loss. Moderately low chance of loss. 50% chance of loss.
18. With some types of investment, such as cash and CDs (certificates of deposit), the value of the investment is fixed. However, inflation will cause the purchasing power of this value to decrease. With other types of investments, such as stocks and real estate, the value is not fixed. It will vary. In the short term it may even fall below the purchase price. However, over the long term, the value of stocks and real estate should certainly increase by more than the rate of inflation. With this in mind, which is more important to you, that the value of your investments does not fall or that it retains its purchasing power?	Much more important that the value does not fall. Somewhat more important that the value does not fall. Somewhat more important that the value retains its purchasing power. Much more important that the value retains its purchasing power.
19. In recent years, how have your personal investments changed?	Always toward lower risk. Mostly toward lower risk. No changes or changes with no clear directions. Mostly toward higher risk. Always toward higher risk.
20. When making an investment, return and risk usually go hand-in-hand. Investments which produce above average returns are usually of above average risk. With this in mind, how much of the funds you have available to invest would you be willing to place in investments where both returns and risks are expected to be above average?	None. 10%. 20%. 30%. 40%. 50%. 60%. 70%. 80%. 90%. 100%.
21. Think of the average rate of return you would expect to earn on an investment portfolio over the next ten years. How does this compare with what you think you would earn if you invested the money in one-year CDs (certificates of deposit)?	About the same rate as from CDs. About one and a half times the rate from CDs. About twice the rate from CDs. About two and a half times the rate from CDs. About three times the rate from CDs. More than three times the rate from CDs.
22. People often arrange their financial affairs so as to qualify for a government benefit or to obtain a tax advantage. However, a change in legislation can leave them worse off than if they’d done nothing. With this in mind, would you take a risk in arranging your affairs to qualify for a government benefit or obtain a tax advantage?	I would not take a risk if there was any chance that I could finish up worse off. I would take a risk if there was only a small chance that I could finish up worse off. I would take a risk as long as there was more than a 50% chance that I would finish up better off.
23. Imagine that you are borrowing a large sum of money at some time in the future. It’s not clear which way interest rates are going to move – they might go up, they might go down, no one seems to know. You could take a variable interest rate that will rise and fall as the market rate changes. Or you could take a fixed interest rate which is 1% more than the current variable rate but which won’t change as the market rate changes. Or you could take a mix of both? How would you prefer your loan to be made up?	100% variable. 75% variable, 25% fixed. 50% variable, 50% fixed. 25% variable, 75% fixed. 100% fixed.
24. Insurance can cover a wide variety of life’s major risks – theft, fire, accident, illness, death, etc. How much coverage do you have?	Very little. Some. Considerable. Complete.
25. This questionnaire is scored on a scale of 0 to 100. In practice, however, the scores range from around 20 to around 80, with the average being 50.What do you think your score will be?

This questionnaire is a product of: FinMetrica Pty Limited