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

Understand the conditions under which a binomial distribution can be used.

Analyze real-world scenarios using probability distributions to determine outcomes.

Grasp the concept of discrete probability distributions.

Apply probability theory to determine outcomes of experiments with specified conditions.

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