If a Firm Establishes a Back-Up Plan, They Are Engaging

question 35

Multiple Choice

If a firm establishes a back-up plan, they are engaging in

• A) contingency planning.
• B) crisis management.
• C) investment reduction.
• D) differentiation.
• E) none of these.

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Definitions:

401k

A retirement savings plan that is sponsored and set up by an employer for its employees; like other retirement plans, there are strict rules as to when the money can be withdrawn without a penalty and strict contribution limits which change from year to year.

Mortality Table

A statistical table showing the probability of death for each age, used primarily by insurance companies to determine premiums.

Full Retirement Benefit

The total amount of money one is entitled to receive from a pension or retirement fund upon reaching the designated retirement age.

Adjusting for Inflation

The process of altering financial figures to account for the change in the purchasing power of money over time.