Which of the Following Is $\underline{not}$ A Characteristic of a Defined Benefit Plan?
A)The Employee Makes

question 25

Multiple Choice

Which of the following is $\underline{not}$ a characteristic of a defined benefit plan?

• A)The employee makes all contributions to the plan.
• B)Benefits may be paid as a single lump sum amount at retirement date.
• C)Benefits can be based on career average salary.
• D)In all cases, the value of pension benefits is directly related to the employee's years of service.

---

Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, typically with fixed dividends.

Common Stock

Common Stock represents shares in a company that entitle the holder to vote at shareholders' meetings and to receive a part of the company's profits as dividends.

Stated Value Stock

Stated value stock is an issue of shares that does not have a par value but instead has a nominal stated value assigned by the company.

Preferred Stock

A type of equity security that offers dividends and other advantages before common stock, in the event of liquidation.