Investment Risk Tolerance Quiz

Want to improve your personal finances? Start by taking this quiz to get an idea of your risk tolerance--one of the fundamental issues to consider when planning your investment strategy, either alone or in consultation with a professional. Choose the response that best describes you--there are no "right" or "wrong" answers. Just have fun!

When you're done, click on the "View Results" button to see how you're doing.

Note: This quiz was developed by two university personal finance professors, Dr. Ruth Lytton at Virginia Tech and Dr. John Grable at Kansas State University. By taking this quiz you will be contributing to a study on measuring financial risk tolerance. Your results will be recorded anonymously. We are not collecting any identifying information.

Investment Risk Tolerance Quiz
1.	In general, how would your best friend describe you as a risk taker?
		A real gambler
		Willing to take risks after completing adequate research
		Cautious
		A real risk avoider
2.	You are on a TV game show and can choose one of the following. Which would you take?
		$1,000 in cash
		A 50% chance at winning $5,000
		A 25% chance at winning $10,000
		A 5% chance at winning $100,000
3.	You have just finished saving for a "once-in-a-lifetime" vacation. Three weeks before you plan to leave, you lose your job. You would:
		Cancel the vacation
		Take a much more modest vacation
		Go as scheduled, reasoning that you need the time to prepare for a job search
		Extend your vacation, because this might be your last chance to go first-class
4.	*If you unexpectedly received $20,000 to invest, what would you do?*
		Deposit it in a bank account, money market account, or an insured CD
		Invest it in safe high quality bonds or bond mutual funds
		Invest it in stocks or stock mutual funds
5.	In terms of experience, how comfortable are you investing in stocks or stock mutual funds?
		Not at all comfortable
		Somewhat comfortable
		Very comfortable
6.	When you think of the word "risk" which of the following words comes to mind first?
		Loss
		Uncertainty
		Opportunity
		Thrill
7.	Some experts are predicting prices of assets such as gold, jewels, collectibles, and real estate (hard assets) to increase in value; bond prices may fall, however, experts tend to agree that government bonds are relatively safe. Most of your investment assets are now in high-interest government bonds. What would you do?
		Hold the bonds
		Sell the bonds, put half the proceeds into money market accounts, and the other half into hard assets
		Sell the bonds and put the total proceeds into hard assets
		Sell the bonds, put all the money into hard assets, and borrow additional money to buy more
8.	Given the best- and worst-case returns of the four investment choices below, which would you prefer?
		$200 gain best case; $0 gain/loss worst case
		$800 gain best case; $200 loss worst case
		$2,600 gain best case; $800 loss worst case
		$4,800 gain best case; $2,400 loss worst case
9.	In addition to whatever you own, you have been given $1,000. You are now asked to choose between:
		A sure gain of $500
		A 50% chance to gain $1,000 and a 50% chance to gain nothing
10.	In addition to whatever you own, you have been given $2,000. You are now asked to choose between:
		A sure loss of $500
		A 50% chance to lose $1,000 and a 50% chance to lose nothing
11.	*Suppose a relative left you an inheritance of $100,000, stipulating in the will that you invest ALL* the money in ONE of the following choices. Which one would you select?**
		A savings account or money market mutual fund
		A mutual fund that owns stocks and bonds
		A portfolio of 15 common stocks
		Commodities like gold, silver, and oil
12.	If you had to invest $20,000, which of the following investment choices would you find most appealing?
		60% in low-risk investments 30% in medium-risk investments 10% in high-risk investments
		30% in low-risk investments 40% in medium-risk investments 30% in high-risk investments
		10% in low-risk investments 40% in medium-risk investments 50% in high-risk investments
13.	Your trusted friend and neighbor, an experienced geologist, is putting together a group of investors to fund an exploratory gold mining venture. The venture could pay back 50 to 100 times the investment if successful. If the mine is a bust, the entire investment is worthless. Your friend estimates the chance of success is only 20%. If you had the money, how much would you invest?
		Nothing
		One month's salary
		Three month's salary
		Six month's salary

Demographic Data
14.	What is your gender?

15.	What is your current age in years?

16.	What is your marital status?

17.	What is the highest level of education you have completed?

18.	*What is your household's* approximate annual gross income before taxes?**

19.	Thinking about your current financial situation, approximately what percentage of your personal and retirement savings and investments are in the following categories? (Note: Please complete every box in this section. For investments catagories that are not selected, place a zero in the box. Percentages should total 100%)
		% Cash, such as savings accounts, CDs, or money market mutual funds
		% Fixed income investments, such as corporate bonds, government bonds, or bond mutual funds
		% Equities, such as stocks, stock mutual funds, direct business ownership or investment real estate (not your personal residence)
		% Other, such as gold or collectibles
20.	Who is responsible for investment allocation decisions in your household?

Risk Tolerance Quiz Source: Grable, J. E., & Lytton, R. H. (1999). Financial risk tolerance revisited: The development of a risk assessment instrument. Financial Services Review, 8, 163-181.