Question: You overheard a conversation by trustees of a defined benefit
You overheard a conversation by trustees of a defined benefit pension plan about how successful they have been in making asset allocation decisions and selecting asset managers. Every year their asset allocation decision has resulted in the allocation to the top-performing asset classes, and the managers that they selected outperformed the asset class benchmark. Comment on whether or not you can judge whether these trustees did an effective job in directing the pension plan.
Answer to relevant QuestionsWhy is the projected value of the liabilities of adefined benefit plan dependent on the discountrate used in the valuation process? How can the interest-rate risk of the projected liabilities of a defined benefit pension plan be measured? If a defined benefit pension plan has liabilitiesthat are interest-rate sensitive and the plan sponsorallows investment in a portfolio of commonstocks, can you determine what will happen to itsfunding gap if interest rates ...A financial institution has hired three external portfolio managers: X, Y, and Z. All three managers have the same benchmark. A performance attribution analysis of the portfolios managed by the three managers for the past ...Explain the differences between a futures contract and a forward contract.
Post your question