The Largest Share of Both Defined-Benefit and Defined-Contribution Pension Fund

question 15

True/False

The largest share of both defined-benefit and defined-contribution pension fund assets is invested in common stocks, often a U.S. stock index.

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Definitions:

Temporary Difference

Refers to differences between the carrying amount of an asset or liability in the balance sheet and its tax base that will result in taxable or deductible amounts in future periods.

Straight Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Capital Cost Allowance

A tax deduction in Canada for the depreciation of tangible property.

Deferred Tax

A tax liability or asset that arises due to temporary differences between the book value and tax value of assets and liabilities.