Seg Funds Investor Profile & Investment Basics question: late husband losing money in the stock market

Seg FundsInvestor Profile & Investment Basics

Joan, 61, is a retired librarian in Victoria, British Columbia. She is widowed, owns her home and has no debts. Besides a small defined benefit pension and her CPP, she has $240,000 of retirement savings, all of it in a savings account paying 1%, because she remembers her late husband losing money in the stock market. Inflation has been running at 3% a year. Which risk is she most exposed to?

A Inflation risk
B Market risk
C Default risk
D Liquidity risk

Show the answer and explanation

Answer: A. Inflation risk

When returns are below inflation, money loses purchasing power over time. A 1% return against 3% inflation means a real loss of roughly 2% a year. Her savings account has little market, default or liquidity risk. Source: CISRO LLQP Curriculum (May 2015), Segregated Funds and Annuities module, component 1.1 (client's situation, investment objectives and investor profile) (as at 12 Oct 2026).

Common mistake

Thinking 'safe' deposits carry no risk.

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Original study material mapped to the public CISRO curriculum; not a real test question.Not affiliated with CISRO, CCIR or any provincial insurance regulator. Verify figures and rules against current guidance before relying on them.