Which Statement Is True with Regard to Problems and Issues

question 31

Multiple Choice

Which statement is true with regard to problems and issues with tax-deferred retirement plans in the United States?

• A)Inadequate participation in employer-sponsored retirement plans can create economic insecurity for retired employees.
• B)Retirement benefits for women are higher than retirement benefits for men,reflecting the higher wages women are paid.
• C)Employees do not invest sufficient amounts in the common stock issued by the companies where they work.
• D)Pension benefits are too often indexed for inflation,burdening employers with high pension costs.

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Definitions:

Present Value

The existing value of a future sum or cash flow sequence, assessed with a certain rate of return.

Compounded Annually

An interest calculation method where interest is added to the principal sum at the end of each year, affecting future interest calculations.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.

Interest Rates

The percentage of a loan amount charged by a lender to a borrower for the use of assets, varying with market conditions and credit risk.