Life Cycle Funds

question 131

Multiple Choice

Life cycle funds

• A)are designed for people with at least 20 years until retirement.
• B)require you to decide how to allocate your investment among stocks,bonds,and money market instruments.
• C)grow less conservative as your retirement date nears.
• D)try to tailor their holding to the investor's individual age,and risk tolerance.

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Definitions:

Salvage Value

Salvage value is the estimated resale value of an asset at the end of its useful life, used in calculating depreciation expenses.

Maintenance Costs

Expenses incurred to keep property, equipment, or software operational and in good working condition.

Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Sum-Of-The-Years'-Digits Method

A depreciation method that accelerates the expense recognition, basing the depreciation for each year on a decreasing fraction of the depreciable amount.