The First Step a Pension Fund Should Take Before Beginning

question 51

Multiple Choice

The first step a pension fund should take before beginning to invest is to

• A) establish investment objectives.
• B) develop a list of investment managers with superior records to interview.
• C) establish asset allocation guidelines.
• D) decide between active and passive management.

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Definitions:

Event A

A generic term used to describe a particular outcome or set of outcomes within a probability space or experiment.

Event B

An occurrence or outcome within a statistical experiment to which a probability can be assigned.

Mutually Exclusive

A characteristic of events that cannot occur at the same time, indicating a clear separation or distinction between them.

Collectively Exhaustive

A property of a set of events that ensures all possible outcomes are covered, leaving no possibility out.