Fiduciary Standards Established by ERISA

question 4

Multiple Choice

Fiduciary standards established by ERISA

• A) require the plan manager to exercise care and judgment that a prudent person would exercise pursuing similar objectives under the same circumstances.
• B) allow the plan manager to make loans to corporate officers from the employee pension fund.
• C) allow the plan manager to divert investment opportunities for his own benefit.
• D) None of the choices are correct.

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Definitions:

Average Rate of Return

A financial ratio that calculates the return, or profit, of an investment over a certain period as a percentage of the initial cost of the investment.

Economic Conditions

The state of a country's economy at a given time, influenced by factors such as GDP, unemployment rates, and inflation.

Liquidity

A company’s ability to convert assets into cash.

Straight-Line Depreciation

A method of calculating the depreciation of an asset which spreads the cost evenly over its estimated useful life.