A Fully-Funded Pension Plan Can Invest Surplus Assets in Equities

question 21

Multiple Choice

A fully-funded pension plan can invest surplus assets in equities provided it reduces the proportion in equities when the value of the fund drops near the accumulated benefit obligation.This strategy is referred to as

• A)immunization.
• B)hedging.
• C)diversification.
• D)contingent immunization.

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Definitions:

Bank Statement

A monthly or quarterly document provided by a bank, detailing all transactions in a customer's account during the statement period.

Check Register

A record book or a spreadsheet where all written checks, cash transactions, and deposits are recorded.

Outstanding Deposit

A deposit that has been made to a bank account but not yet cleared or recognized in the bank's record system.

Check Register

A record used to keep track of checks written, deposits made, and current balance in a checking account.