Which of the Following Is True About Defined Contribution Plans

question 54

Multiple Choice

Which of the following is true about defined contribution plans?

• A)They shift the investment risk to the employer.
• B)They present greater administrative challenges to employers.
• C)They promise a specific benefit level for employees upon retirement.
• D)They are preferred more in smaller companies than larger ones.
• E)They have become less common.

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Definitions:

Arithmetic Sequence

A sequence of numbers in which each term after the first is found by adding a constant difference to the preceding element.

Nth Partial Sum

The sum of the first 'n' terms in a sequence, used in series calculations.

Geometric Sequence

A sequence in which each number following the first is generated by multiplying the former number by a fixed, nonzero factor, this factor is identified as the common ratio.

Partial Sum

The sum of a portion of a sequence of terms, or a method of summing certain numbers by grouping.