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1.
Two life-cycle funds with the same target date will likely earn different returns.
True. Two life-cycle funds will likely earn different returns because they hold different portfolios inside them.
2.
Which is an advantage of life-cycle funds?
They eliminate the need to adjust the asset allocation within your portfolio on your own as you progress toward retirement. They automatically become more appropriately conservative as the years go by as you approach and enter retirement.
3.
Once you have chosen a life-cycle fund for your retirement, _______.
You can switch to a different life-cycle fund if it meets your needs better. You can roll your fund over to a different one.
4.
Life-cycle funds eliminate _______.
The need to adjust asset allocation on your own. These funds take care of that on their own.
5.
Life-cycle funds eliminate risk by investing in a broad universe of diversified mutual funds.
False. Nothing can eliminate investment risk. Life-cycle funds aim to minimize it.