As per the three-grade risk profile classification discussed in the NISM Series X-B workbook, which of the following best describes an 'Aggressive Investor'?

[ A ]Experienced investors who have used a range of investment products in the past, are willing to take on investment risk, and are willing to take risk with a significant portion of their assets to generate long-term returns[ CORRECT ]

[ B ]Investors who are new to risky instruments and prefer to keep their money in bank accounts or safe income-yielding instruments

[ C ]Investors who avoid all risk-bearing instruments and may be willing to invest only a small portion in risky assets if it benefits the longer term

[ D ]Investors who understand they must take risk for long-term goals but are willing to risk only a part of their available assets

Takeaway

Option A is correct: the workbook classifies Aggressive Investors as experienced investors who have used a range of investment products, take an active approach to managing investments, and are willing to risk a significant portion of their assets because they understand this is crucial to generating long-term returns.

Derivation

The workbook sets out a 3-grade classification of risk profiles: Conservative, Moderate and Aggressive. Conservative investors avoid risk and stick to safe instruments; Moderate investors accept risk with only part of their assets; Aggressive investors are experienced, actively manage investments, and are willing to risk a significant portion of their assets for long-term returns. A common error is confusing 'willing to take risk' (Moderate) with 'willing to take risk with a significant portion of assets' (Aggressive) since both mention risk-taking.

Why the others fail

B — Investors who are new to risky instruments and prefer to keep their money in bank accounts or safe income-yielding instruments

This describes a Conservative Investor, not an Aggressive Investor.

C — Investors who avoid all risk-bearing instruments and may be willing to invest only a small portion in risky assets if it benefits the longer term

This is also the Conservative Investor's profile, the lowest of the three grades, not the Aggressive Investor.

D — Investors who understand they must take risk for long-term goals but are willing to risk only a part of their available assets

This describes a Moderate Investor, who takes risk with only part of their assets, unlike an Aggressive Investor.