As You near Retirement, You Should Allocate a Substantial Portion

question 78

Multiple Choice

As you near retirement, you should allocate a substantial portion of your portfolio to ________ to reduce volatility.

• A) stocks
• B) bonds
• C) real estate
• D) gold

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Definitions:

Accelerated Depreciation

A method of calculating the depreciation of an asset that assumes the asset will lose value more quickly in its initial years of use.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life evenly, resulting in equal depreciation expenses per year.

Fixed Asset Turnover Ratio

An efficiency ratio that measures a company's ability to generate net sales from its fixed-asset investments, such as property, plant, and equipment.

Asset Impairment Loss

A charge recognized when the carrying amount of an asset exceeds its recoverable amount, indicating the asset's value has declined.