If a Constant-Dollar Plan Portfolio Is Profitable Over the Long

question 53

Multiple Choice

If a constant-dollar plan portfolio is profitable over the long run, the in value over time.

• A) conservative portion will increase
• B) conservative portion will remain constant
• C) aggressive portion will decrease
• D) entire portfolio will remain constant

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Definitions:

Half-Year Convention

A tax and accounting method that treats all assets acquired or disposed of during a year as being acquired or disposed at the midpoint of that year.

Sum-Of-The-Years'-Digits

An accelerated depreciation method that applies a decreasing fraction to the depreciable cost of an asset over its useful life.

Depreciation Expense

An accounting method for allocating the cost of a tangible asset over its useful life, reflecting the asset's decrease in value over time.

Impairment Review

An examination of assets to determine if their carrying value exceeds their recoverable amount, potentially leading to an impairment loss.