One Reason for the Declining Importance of Pension Funds Is

question 32

Multiple Choice

One reason for the declining importance of pension funds is the:

• A) decrease in pension benefits for workers.
• B) downsizing of U.S. companies.
• C) large number of conversions into self-directed plans.
• D) increasing number of federal regulations that restrict pension fund portfolios.

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Definitions:

IRR

A financial metric used to estimate the profitability of potential investments, equal to the discount rate that makes the net present value of all cash flows both in and out of the investment equal to zero.

Pawn Shop

A retail business that lends money to people who bring in valuable items which they leave with the pawnbroker as collateral.

Payback Period

The time it takes for an investment to generate an amount of income or cash equal to the cost of the investment.