There are four components to value in a retirement plan: consumption needs in retirement, pension plan, unsheltered savings and sheltered savings. 1) True 2) False Question 2 (1 point) The three main savings vehicles are employer pension plans, government pension plans and the family home. 1) True 2) False When the average higher return of a diversified portfolio over-compensates for the bad years, and the compounded return is almost sure to outperform the lower steadier returns in government bonds and bills, the effect is known as time diversification. 1) True 2) False Question 4 (1 point) Defined benefit plans are more risky to since they bear the investment risk of funds invested in the plan. 1) employees 2) employees and employers 3) actuaries 4) employers