Question: QUESTION 68 A defined benefit plan has 300 employees with a majority of them under age 40. The pension fund manager has collected the following

QUESTION 68

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%.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

QUESTION 67 Manor Endowment (ME) funds medical research. ME has an average spending rate of 5.3% over the past three years, while inflation has averaged 1.6%. The endowments portfolio generated a 19%...

QUESTION 67 Manor Endowment (ME) funds medical research. ME has an average spending rate of 5.3% over the past three years, while inflation has averaged 1.6%. The endowment's portfolio generated a...

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...

Click Submit to complete this assessment Question 10 A defined benefit plan has 100 employees with a majority of them over age 40. The pension fund manager has collected the following data: . Risk...

A defined benefit plan has 300 employees with a majority of them under age 50. The pension fund manager has collected the following data: Risk-free rate 2.15% S&P 500 return (5-year average) 10.42%...

A defined benefit plan has 100 employees with a majority of them over age 40. The pension fund manager has collected the following data: Risk-free rate 2.50% S&P 500 return (5-year average) 9.87%...

Retirement Planning Final Exam (Chapters 2 14) Which of the following is an example of a qualified retirement plan?Rabbi trust.401(k) plan.Nonqualified stock option plan.ESPP. John has been employed...

CA DAw my of $7.000 down of SSD $160.000 10 in 2020. La copyright infringement it, and in 2001, Lagan lost the court case Lawy.000 to u No preventies had been recorded in the books relative to the...

Create income statement and balance sheet for 2016 Income Statement in '000 Notes 20X5 1 1 80 805 42 004 38 801 Revenues Cost of sales Gross profit Selling and administrative expenses Other operating...

:Answer all questions. case study: During most of the 20th century, wages in the United States were set not just by employers but by a mix of market and institutional mechanisms. Supply and demand...

Each of the three homogeneous plates welded to the rod has a density and a thickness a. Determine the length l of plate C and the angle of placement, , so that the center of mass of the assembly...

What drives a companys price-to-book equity and price-to-earnings multiples?

Question: I n machine learning, certain algorithms, like gradient descent, can b e modeled using differential equations t o track the change i n error over time. Consider the model: y ' = 1 + t 1 + y...

A number of terms are listed below: Artificial cost pools .......... Common cost Core operating division ......... Direct method Dual-rate .............. Incremental cost allocation method Sequential...

Schultz Electronics manufactures two large-screen television models: the Royale which sells for $1,600, and a new model, the Majestic, which sells for $1,300. The production cost computed per unit...

Do business seniors at your school prepare for class more than, less than, or about the same as business seniors at other schools? The National Survey of Student Engagement (NSSE) found that business...

The sales manager of Flying Carpets, a carpet manufacturer and wholesaler, is analyzing the profitability of two of the company's customers. One customer, a boutique store, purchases small orders for...

If you use a 0.10 level of significance in a (two-tail) hypothesis test, what is your decision rule for rejecting a null hypothesis that the population mean is 500 if you use the Z test?

Tori and some other childeen experimented with balls to see which ones rolled. First using a piece of cardboard to use as a ramp, they angled it on a block to the floor to test the balls. Then Tori...

CNLs have been instrumental in advancing evidence-based practice (EBP) in healthcare systems. From the preceding scenario, describe at least two EBP strategies that were employed by the CNLs.

As noted, the initial success of this small test of change led to the initiation of leadership-driven rounds throughout all inpatient units at University Hospital. What would be the next PDSA cycle...

Using the Model for Improvement, Plan-Do-Study-Act (PDSA) methodological framework, describe the steps used in the project to prevent acquired pressure injuries.