As You Get Older, You Decide to Reduce the Risk

question 37

Multiple Choice

As you get older, you decide to reduce the risk level of your retirement portfolio because your portfolio is nearing your minimum acceptable level. As the portfolio does better, you reallocate funds into higher-risk categories. You are practicing a form of ________.

• A) manipulating tax shelters
• B) involuntary intergenerational transfers
• C) excessive savings
• D) dynamic hedging

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Definitions:

Road Network

A system of interconnected roads designed to accommodate vehicular traffic.

Middle-income Households

Families or living units with a total income that falls in the middle of a nation's income distribution, neither rich nor poor.

Purchasing Power

Purchasing power denotes the quantity of goods or services that can be bought with a specific amount of money, reflecting the value of currency.

Economic Infrastructure

The underlying physical and organizational structures needed for the operation of a society or enterprise, such as transportation and communication systems.