Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following is true about a target date fund (TDF)?

A TDF invests only in stocks throughout its entire life cycle.

A TDF is designed to provide only short-term capital gains.

A TDF guarantees a specific rate of return by the target date.

A TDF automatically adjusts its asset allocation to become more conservative as the target date approaches.

Previous problemNext problem

Verified step by step guidance

Understand the concept of a Target Date Fund (TDF): A TDF is a type of investment fund designed to help investors save for a specific goal, such as retirement, by a particular target date. It automatically adjusts its asset allocation over time.

Clarify the lifecycle of a TDF: Early in its lifecycle, a TDF typically invests more heavily in growth-oriented assets like stocks to maximize returns. As the target date approaches, it shifts towards more conservative investments like bonds and cash equivalents to reduce risk.

Evaluate the first statement: 'A TDF invests only in stocks throughout its entire life cycle.' This is incorrect because TDFs adjust their asset allocation over time, moving away from stocks as the target date nears.

Evaluate the second statement: 'A TDF is designed to provide only short-term capital gains.' This is incorrect because TDFs are designed for long-term investment goals, not short-term gains.

Evaluate the third statement: 'A TDF guarantees a specific rate of return by the target date.' This is incorrect because no investment fund can guarantee a specific rate of return. The correct statement is: 'A TDF automatically adjusts its asset allocation to become more conservative as the target date approaches.'