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9 September, 04:55

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

Increasing your stocks and decreasing your bonds.

Decreasing your stocks and increasing your bonds.

Slightly decreasing your stocks and holding your bonds the same.

Holding your stocks the same and slightly increasing your bonds.

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  1. 9 September, 06:55
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    The correct answer is letter "B": Decreasing your stocks and increasing your bonds.

    Explanation:

    Target-date funds are pools of assets employees with a 401 (k) retirement account can access. Target-date funds consider stocks as riskier assets than bonds, thus, more stocks than bonds are included in the fund of the employee at first. However, as soon as the date when the employee is to retire approaches, the fund automatically lowers the number of stocks in the employee's account to include more bonds, which are safer securities.
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