All of the Following Statements About Various Types of Pension

question 30

Multiple Choice

All of the following statements about various types of pension plans are true EXCEPT

• A)Under a trust-fund plan,an individual annuity is purchased for each participant,and additional annuity credits are purchased annually.
• B)A separate investment account is a group pension account with a life insurance company.
• C)Under an investment guarantee contract,the insurer receives funds over a number of years and if actual interest rates are higher than the guaranteed projected rate for the later years,the higher rate is paid.
• D)Under a guaranteed investment contract,the insurer guarantees the principal of a lump sum deposit as well as an interest rate for a number of years on the deposit.

---

Definitions:

Correlation Coefficient

A numerical index that determines both the magnitude and orientation of a linear correlation between two variables, which can vary between -1 and 1.

Variables

Elements, features, or factors that are likely to vary or change among subjects in a study or a population.

Spearman Rank

An assessment of rank correlation using a non-parametric approach that evaluates the extent to which a monotonic function can accurately describe the relationship between two variables.

Correlation Coefficient

A statistical measure that calculates the strength and direction of a linear relationship between two variables, ranging from -1 to 1.