Which of the Following Is Not True Regarding the Life-Cycle

question 32

Multiple Choice

Which of the following is not true regarding the life-cycle approach to investment?

• A) It is most appropriate for institutions.
• B) It automatically becomes more conservative as the investor nears retirement age.
• C) It is suited to 401(k) plans.
• D) It can be implemented using life-cycle (also known as target-date) funds.

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Definitions:

Fixed Amount

A specified sum of money that does not vary or change under certain conditions or over a certain period of time.

Hold

To maintain possession or control of something, or to defer a decision or action until further notice or information is received.

Funds

Financial resources set aside for a specific purpose, often pooled together from multiple sources and managed to achieve a specific investment goal.

Collecting

The action or hobby of gathering items of a particular type, often of cultural, historical, or financial value.