Which of the Following Best Explains Why the Social Security

question 87

Multiple Choice

Which of the following best explains why the Social Security system will face financial difficulties in the future?

• A) Too much Social Security revenue was invested in the private sector rather than in government bonds.
• B) In the next two decades, the number of workers paying into the system will decline sharply relative to the number of retirees collecting benefits.
• C) The federal government does not pay interest on the money it borrows from the Social Security system.
• D) The funds in the Social Security trust fund were invested in high-risk ventures that failed to pay off.

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Definitions:

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset or instrument at a specified price within a specific time period.

Exercise Price

The cost at which an option's owner is allowed to purchase (for a call option) or sell (for a put option) the underlying asset.

Stock Price

Stock Price is the cost of purchasing a share of a company as listed on a stock exchange, reflecting the market's valuation of the company.

Put Option

A financial derivative that gives the holder the right, but not the obligation, to sell a specified quantity of an underlying asset at a set price within a specified timeframe.