As you get older, a Target Date Fund will adjust by…

Question options:

Decreasing your stocks and increasing your bonds.

Increasing your stocks and decreasing your bonds.

Slightly decreasing your stocks and holding your bonds the same.

Holding your stocks the same and slightly increasing your bonds.

As you get older, a Target Date Fund will adjust by "Decreasing your stocks and increasing your bonds".

Option: A

Explanation:

Goal pension plans are structured to be the investment plan, which an investor utilizes to prepare for purpose of retirement. The concept is simple in life-cycle funds or age-based funds: a fund is picked up and invest as much possible then forget until one reach respective retirement age.

Although investors who invested their assets in a retirement fund must be aware of how other retirement investments could problem their allocation of assets. For instance, if a target fund has an 80% stock and a 20% bond asset allocation, but the investor purchases a deposit certificate with 10% of their retirement assets, this essentially declines the stock allocation of the overall portfolio of the investor and leads to increment of the bond allocation.

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