Which item is a typical component of an investor policy statement (IPS)?

• A. Time horizon
• B. Daily market tips
• C. Celebrity endorsements
• D. Social media policy

Answer: (A)

An investor policy statement outlines how an investor will approach their investments, including objectives, constraints, and the plan for achieving them. The time horizon is a typical component because it directly shapes the investment strategy: a longer horizon allows taking on more risk and accepting more short-term volatility in pursuit of higher long-term returns, while a shorter horizon emphasizes preservation of capital and liquidity.

Other options don’t fit the IPS context. Daily market tips are tactical guidance, not part of a long-term plan. Celebrity endorsements and a social media policy relate to marketing or communications, not the structured decisions about investment goals and risk management that an IPS covers.