Asked by Regan Waite on May 07, 2024
Verified
Many defined benefit pension plans have a target rate of return on investment that is equal to the ________.
A) firm's return on equity
B) plan's assumed actuarial rate of return
C) economic inflation rate because wages often increase with inflation
D) estimated stock market return
Target Rate Of Return
The specific return that an investor aims to achieve on an investment, which guides their selection of investment vehicles and strategies.
Actuarial Rate
The rate developed by actuaries based on statistical data, used in calculating insurance premiums and pension contributions.
Inflation Rate
The rate at which the general level of prices for goods and services is rising, and, subsequently, eroding purchasing power.
- Comprehend the distinctions between defined benefit and defined contribution retirement schemes, focusing on which party assumes the financial risks.
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Learning Objectives
- Comprehend the distinctions between defined benefit and defined contribution retirement schemes, focusing on which party assumes the financial risks.
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