Which of the Following Best Describes the Changes in Asset

question 34

Multiple Choice

Which of the following best describes the changes in asset class composition that occur with increased age,according to the investor life cycle theory of Seigal (1991) ?

• A) more wealth allocated to equity
• B) more wealth allocated to fixed interest
• C) less wealth allocated to property
• D) less wealth allocated to cash

---

Definitions:

Salvage Value

The projected remaining worth of an asset once it has reached the end of its operational lifespan.

Internal Rate

Refers to the internal rate of return (IRR), which is a discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.

Cash Outflows

Financial transactions representing money leaving a business, such as payments for expenses, investments, and loans.