Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 – Comprehensive All-in-One Guide for Exam Success!

The investment policy serves several important functions in guiding investment decisions and strategies, but it does not provide a guarantee against losses in the portfolio. Investment policies are designed to define the overall strategy, set investment objectives, and outline the risk tolerance of an investment portfolio. However, they do not eliminate the inherent risks associated with investing. The nature of financial markets means that all investments carry a degree of risk, including the potential for loss.

Therefore, while the investment policy establishes guidelines for asset allocation, investment constraints, and approaches to performance evaluation, it cannot assure investors that they will avoid losses. The other options accurately reflect the functions of an investment policy, such as providing a foundation for understanding portfolio constraints, serving as a basis for review and evaluation of performance, and offering guidelines to help achieve specific financial goals over time.