Question: A correlation coefficient between pension assets and annual operating cash flows of the plan's sponsor is 0.85. Details of the correlation coefficient will most likely:
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A correlation coefficient between pension assets and annual operating cash flows of the plan's sponsor is 0.85. Details of the correlation coefficient will most likely:
a. Appear in the liquidity constraint.
b. Require higher fees be paid to the investment manager.
c. Alter the tax treatment of the pension funds.
d. Result in a low ability to take risk in the policy statement.
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