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Basic Question 3 of 8

When the ability to take risks is below average and the willingness to take risks is above average, the investor's risk tolerance should be assessed as ______.

A. below average
B. average
C. above average

User Contributed Comments 6

User Comment
maryprz14 that means the client must calm down...lol
khalifa92 calm ur tits
zriddle so ability is more important than willingness?
jabiller yes because they could lose retirement money at retirement and not have enough time to recoup.
kingirm ability is the constraint ...
Fraser1997 It's not the case that that ability is more important, you take the lowest of the two factors. So if instead: the ability to take risk was above average and tolerance of risk was below average, you would still assess it as below average.
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Your review questions and global ranking system were so helpful.
Lina

Lina

Learning Outcome Statements

describe risk and return objectives and how they maybe developed for a client

explain the difference between the willingness and the ability (capacity) to take risk in analyzing an investor's financial risk tolerance

CFA® 2025 Level I Curriculum, Volume 6, Module 4.