The Life-Cycle Theory of Asset Allocation Proposes That as Investors

question 1

Multiple Choice

The life-cycle theory of asset allocation proposes that as investors progress through life their:

• A) asset allocation will tend to become more conservative.
• B) earnings increase in their 20s, reach a peak at about age 45, then decline.
• C) assets must grow geometrically in order to achieve reasonable goals.
• D) asset allocation should remain fixed in order to avoid short-sighted adjustments.

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Definitions:

Propulsive Gait

A type of walking where the person seems to be pushed forward, with quick, small steps; often associated with neurological disorders like Parkinson's disease.

Waxy Flexibility

A symptom of catatonia characterized by the maintenance of a body position or posture in which the person's limbs remain in the position they are placed by another person.

Spontaneous Movement

Unplanned, voluntary or involuntary movements that occur without conscious thought or intention.

Daily Living

Refers to the routine activities that people tend to do every day without needing assistance, such as eating, bathing, and dressing.