702 1. The optimal allocation to stocks as a share of financial wealth is S - R, 1+ A A rule-of-thumb advocated by some financial advisors is to let the allocation to stocks decline linearly in age up to 20%. S age max 1 (1 100 [3 points, 1 point for each part] (a) Assume that your human capital is H = 0 at age 80 and thereafter. The rule-of- thumb coincides with the optimal allocation for what value of R? (b) For each 10 years from age 20 to 70, compute the ratio of human capital to financial wealth H/A such that the rule-of-thumb coincides with the optimal allocation. Use the same value of as part (a). (c) Do you think that the rule-of-thumb is a good idea? Why or why not? 702 1. The optimal allocation to stocks as a share of financial wealth is S - R, 1+ A A rule-of-thumb advocated by some financial advisors is to let the allocation to stocks decline linearly in age up to 20%. S age max 1 (1 100 [3 points, 1 point for each part] (a) Assume that your human capital is H = 0 at age 80 and thereafter. The rule-of- thumb coincides with the optimal allocation for what value of R? (b) For each 10 years from age 20 to 70, compute the ratio of human capital to financial wealth H/A such that the rule-of-thumb coincides with the optimal allocation. Use the same value of as part (a). (c) Do you think that the rule-of-thumb is a good idea? Why or why not