In a Defined-Contribution Plan

question 67

Multiple Choice

In a defined-contribution plan:

• A) only the employee makes contributions into the fund.
• B) the retirement benefits will vary with both the amount contributed and the performance of the fund.
• C) the benefits are determined mainly by years of service.
• D) no vesting is required; employees are eligible for benefits from the time they make their first contribution.

Evaluate stocks based on dividends and price appreciation as main components of future cash flows.

Understand the impact of growth rates and required rates of return on stock valuation.

Apply practical knowledge in determining the maximum price to pay for a stock based on its expected dividends and selling price in the future.

Understand the goal of investors to maximize returns while minimizing risk.

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Definitions:

Society Responds

The way in which a community or group reacts to particular issues, changes, or stimuli, including policies, cultural shifts, and social attitudes.

Psychological Explanations

Theories or reasoning that attribute behavior or mental processes to psychological factors, such as emotions, desires, or cognitive functions.

Durkheimian Explanations

Theoretical perspectives based on the work of Emile Durkheim, focusing on how societal structures and cohesion influence behavior and social outcomes.

Relationship Statuses

Descriptions of individuals' romantic or familial connections, such as single, in a relationship, married, divorced, or widowed.