In an Accumulation Superannuation Fund

question 50

Multiple Choice

In an accumulation superannuation fund:

• A) the employee is promised an allocated benefit based on earnings and years of service.
• B) superannuation income varies depending on how well the plan's investments have performed.
• C) if the funds in the plan exceed the promised amount, the excess remains with the issuing firm or institution.
• D) all of the earnings' taxes are paid by the employer.

---

Definitions:

Market Proxy

A singular asset or portfolio that represents the characteristics of an entire market segment or the market as a whole.

CAPM

The Capital Asset Pricing Model, which describes the relationship between systematic risk and expected return for assets, particularly stocks, suggesting that investors need to be compensated in two ways: time value of money and risk.

Fama and French

Scholars who developed a three-factor model for explaining the risk and return of stocks and other investments.

Econometrics

The application of statistical and mathematical theories to economics for the purpose of testing hypotheses and forecasting future trends.