Risk tolerance: is it ever 'Average'?

CFA Level III Portfolio Management
#1

It seems that we always have examples where the investor’s risk tolerance is either clearly ‘above average’ or ‘below average’.
Would it be acceptable to rate a risk tolerance as ‘average’ in the case below for a pension fund (Defined benefit plan)?

  • company in a declining industry but still profitable (slightly more risk?)
  • slightly underfunded (less risk)
  • aging workforce (less risk)
  • currently low number of retirees/workforce (more risk)
#2

No, it’s never average.

But they don’t ask that any longer.

Now they ask for factors that increase the investor’s risk tolerance and factors that decrease it. That makes it a lot more flexible for them: not everything has to point in the same direction.

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