When a Company Sets Up a Defined Contribution Pension Plan

question 39

Multiple Choice

When a company sets up a defined contribution pension plan, the __________ bears all the risk and the __________ receives all the return from the plan's assets.

• A)employee; employee
• B)employee; employer
• C)employer; employee
• D)employer; employer
• E)cannot tell; depends on the economic environment.

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Definitions:

Type I Error

A Type I Error occurs when a true null hypothesis is incorrectly rejected, also known as a "false positive".

Binomial Population

A population in which each member of the population has only two possible outcomes or states, often conceptualized as success or failure.

Population Proportion

The fraction or percentage of individuals in a population who possess a particular attribute or characteristic.

Critical Value

A point on the scale of the test statistic beyond which we reject the null hypothesis; it marks the boundary for deciding whether a statistic is significant.