A Funded Pension Plan _____

question 13

Multiple Choice

A funded pension plan _____.

• A)pays current beneficiaries from the contributions of current contributors
• B)pays current beneficiaries from the contributions of new contributors
• C)maintains assets equal to the present value of future liabilities
• D)is functionally equivalent to a pay-as-you-go system,except for the pension plan is not compulsory

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Definitions:

Negotiability

The quality of a document, particularly a financial instrument, that allows it to be transferred or assigned freely from one party to another.

Holder

An individual or entity that legally possesses a negotiable instrument, such as a check or a bond, and has the right to collect the value of the instrument.

Payable

Describes an amount of money that is owed and should be paid, often within a specified period.

Bearer

Refers to an individual or entity in possession of a negotiable instrument, such as a check or bond, that is payable to whoever holds it.