SIE Exam Practice Question 428

Correct Answer: B

Explanation:

B: Fixed-income investors are more exposed to inflationary risk than equity investors. Thus, both Steve and Bill will be exposed to this type of risk. However, the degree of inflationary risk is higher for longer term investments. Since Steve's portfolio consists of securities that will expire within a year and Bill's does not, Bill's portfolio has more inflationary risk than Steve's.