A Fully-Funded Pension Plan Can Invest Surplus Assets in Equities

question 53

Multiple Choice

A fully-funded pension plan can invest surplus assets in equities provided it reduces the proportion in equities when the value of the fund drops near the accumulated benefit obligation. This strategy is referred to as

• A) immunization.
• B) hedging.
• C) diversification.
• D) contingent immunization.
• E) overfunding.

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Definitions:

Office Environment

The physical and cultural setting of an office, including its layout, facilities, and interpersonal relationships, which can affect employees' performance and satisfaction.

Service Quality Dimension

The aspects or facets through which the quality of a service can be assessed, including reliability, responsiveness, assurance, empathy, and tangibles.

Cost

The value of financial expenditure on goods and services or the effort, loss, or sacrifice necessary to achieve or obtain something.

Guarantee

A formal assurance, typically by a manufacturer or seller, to a buyer that certain conditions, such as the quality or lifespan of a product, will be met.