Archive / Investment Adviser (Level 2) / Non-Life Insurance Products

nism-series-xb-suitable-asset-mix-moderate-risk-investor[ INVESTMENT ADVISER (LEVEL 2) ]

Given Mr. C's situation (45 years old, sole earner, active home/car loans, multiple upcoming goals), what overall asset category mix is MOST suitable for his long-term portfolio?

[ A ]Primarily liquid assets only

[ B ]Primarily growth with some income-oriented assets[ CORRECT ]

[ C ]Primarily growth assets exclusively (100% equity)

[ D ]Combination of liquid and income-oriented assets with zero equity

Takeaway

Given Mr. C's Moderate risk profile, the most suitable long-term asset mix is primarily growth assets combined with some income-oriented assets, so option B is correct.

Derivation

Mr. C needs equity-driven growth to accumulate sufficient capital for his long-term retirement and future goals over his remaining working years, since debt alone is unlikely to outpace inflation meaningfully. At the same time, given his active loan EMIs and some near-term goal-funding needs, a pure 100% equity allocation would expose him to unacceptable drawdown risk right when cash may be needed. A blended mix — mostly growth, with an income-oriented cushion — balances long-horizon accumulation against near-term liability servicing. This tests whether candidates can translate a qualitative risk profile (Moderate) into a coherent asset-allocation recommendation rather than picking an extreme.

Why the others fail

A — Primarily liquid assets only

Holding primarily liquid assets exposes the portfolio to inflation drag over his long remaining horizon and fails to accumulate enough for his long-term goals.

C — Primarily growth assets exclusively (100% equity)

A 100% growth-asset allocation exposes him to excessive drawdown risk precisely when loan EMIs and near-term goals require stable, accessible funds.

D — Combination of liquid and income-oriented assets with zero equity

Zero equity exposure prevents his portfolio from beating inflation over his remaining roughly 15 years to retirement, undermining his long-term accumulation goals.