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15 April, 00:39

Henrietta Marston plans to retire in the year 2050. She is considering a fund that will be more aggressive now and become more conservative as she approaches retirement. Which of the following funds would you recommend to her?

a. money-market fund

b. lifecycle fund

c. Index fund

d. socially responsible fund

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  1. 15 April, 00:59
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    Atnswer:

    b. lifecycle fund

    Explanation:

    as from now to 2050 are still remaining 31 years, the money invested is able to go under different risk profiles, looking for getting the maximun return, the lifecycle fund is an excellent choice, it is because this kind of strategies changes according the risk of its costumer changes. it is expected to have during the first years a high exposition to risk such as equity or derivatives, and the more age of the costumer the lower risk profile, so the closer to 2050 the more expected investment into low risk assets, such as fixed income (this is made for having the less losses possible)
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