Question: 3. A defined benefit plan has 300 employees with a majority of them under age 40. The pension fund manager has collected the following data:

3. A defined benefit plan has 300 employees with a majority of them under age 40. The pension fund manager has collected the following data: Risk Free rate=2.3%, Discount rate used to compute pension obligations= 7.1%, Expected inflation rate = 1.7%, and Yield to maturity on the company 30-year bonds=6.2%. The return objective for the pension fund is closest to: A) 6.2% B) 7.1% C) 8.8% D)9.6%

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