Both Employers and Employees May Contribute to Defined Contribution Plans

question 51

True/False

Both employers and employees may contribute to defined contribution plans. However, the amount that employees may contribute to the plan in a given year is limited by the tax law while the amount that employers may contribute is not.

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Definitions:

Current Yield

The annual income (interest or dividends) earned from an investment, expressed as a percentage of the current price.

Annual Coupon

The fixed interest rate paid by a bond annually to its holder.

Yield To Maturity

The total return anticipated on a bond if it is held until the maturity date, considering both interest payments and capital gains or losses.

Price Decrease

A reduction in the cost of goods or services compared to previous prices.