With a Defined Contribution Plan the Risk of Pension Fund

question 21

True/False

With a defined contribution plan the risk of pension fund performance rests with the employees/retirees of the company, while with a defined benefit plan this risk rests with the company.

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Definitions:

Hypothesis Test

A statistical method that uses sample data to evaluate a hypothesis about the properties or parameters of a population.

Interval Estimate

An estimate of a population parameter that specifies a range of possible values within which the parameter is expected to lie, with a certain level of confidence.

Unknown Parameter

A value within a statistical model that is not observed directly but is estimated from the data.

P-Value

The possibility of observing test findings that are as extreme or more so than the actual findings, under the condition that the null hypothesis is valid.