16. Older folks are advised to have higher risk investments b/c they have less time remaining to recover from bad investment returns. a) True b) False 17. Target Date FundsThe Target Date 2025 fund is for older people than the Target Date 2060 Fund and so the 2025 fund is lower risk than the 2060 Fund meaning it has a lower percentage invested in stocks. a) True b) False 18. Target Date Funds-In the year 2020, the Target Date 2060 fund is for investors who expect to retire in 40 years and so ought to have a high percentage of funds invested in stocks. By the year 2050, these same investors are a lot older having only 10 years until retirement. Therefore, the fund should see a _in the percentage invested in stocks between the year 2020 and the year 2050. a) increase b) decrease c) the percentage remains constant 19. On average, investing in the stock of only one firm has a standard deviation of returns of 50% while investing in the stocks of 40 or more firms typically offers the investor a standard deviation of returns of only 20%. This is a 60% reduction in risk (from 50 to 20) and demonstrates the benefits of DIVERSIFICATION. a) True b) False 20. The target date funds used as examples in class tended to invest in index mutual funds like the total U.S. stock market and the total world stock market and a bond index fund. a) True b) False 21. The typical amount recommended for an emergency fund is 1 to 3 months of living expenses. a) True b) False b) Falca 22. Job change and 401k-When changing jobs, if you ask your previous employer to give you your 401K balance (you take possession of your money), you will receive less than 80% of your 401k account balance due to tax withholding and penalties. Therefore, you won't have enough money to put into your new employer's 401k account. You have essentially withdrawn some money early and will owe taxes and penalty on that money. 23. In class, it was recommended that a person save 15% of gross or 20% of after tax. 24. Inheritance-When someone dies, his/her assets are given to the living based on a set of legal priorities. We learned in class that how the asset is titled (e.g. sole owner vs joint ownership (maybe by spouses), beneficiary designation, will, and intestate laws (by state of residence) are used. The law uses a process of looking at each of these in the sequence given. 25. What is the 4% rule? 26. In the context of health insurance, what does it mean to "go out of network