3. The maximum amount of invetment risk someone with a high risk tolerance but less than one year in time horizon should take is

a. an aggressive position.

b. a moderately aggressive position.

c. a moderate position.

d. a conservative position.

5. A financial planner who is worried that interest rates will increase should

a. increase the duration of client bond portfolios.

b. decrease the yield earned on fixed-income investments.

c. increase the average maturuity with bond portfolios.

d. decrease the duration of client bond portfolios.

6. Jamie is in the 25% combined federal and state tax bracket. She is considering purchasing either a corporate bond that yields 5.0% or a municipal bond from the state where she resides. She should purchase the corporate bond, assuming the credit quality was the same, if the municipal bond

a. yields more than 6.7%.

b. Yields more than 3.75%.

c. yields more than 5.0%.

d. yields less than 3.75%.