Series 7 Exam Question 319: Answer and Explanation

Question: 319

As a client's investment objectives change, a registered rep should keep track of those changes so that they can rebalance the client's portfolio and make proper recommendations. Which of the following changes may affect a customer's investment objectives?

I. Growing older

II. Getting divorced

III. Having triplets

IV. Getting a higher paying job

• A. I and III
• B. I, II, and III
• C. II, III, and IV
• D. I, II, III, and IV

Correct Answer: D

Explanation:

D. Certainly just about anything you can think of could change a client's investment objectives. As people get older, they usually can't take as much risk. Conversely, investors who get higher-paying jobs are likely to want to take additional risk. Someone who is getting (or has gotten) divorced is likely to have less money (due to alimony payments, one person paying for the house instead of two, child support payments, and so on). Obviously, having triplets puts a financial burden on an investor (unless they get a reality show).