Retail Securities Practice Questions - CIRO Retail Securities Exam (RSE) Exam

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Under CIRO guidelines, how is a client's risk profile determined when there is a discrepancy between their risk tolerance and their risk capacity?

The client's risk profile is set based on the average of their risk tolerance and risk capacity. The client's risk profile is set based on the higher of their risk tolerance and risk capacity. The client's risk profile is set based on the lower of their risk tolerance and risk capacity. The representative must choose whichever metric aligns with the target return of the recommended portfolio.

Correct Answer:

The client's risk profile is set based on the lower of their risk tolerance and risk capacity.

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