the economics of money, banking, and financial markets

340 #

© 2014 Pearson Canada Inc.#

5. 
   

   In a defined-contribution plan future benefits ____.
   A) are set in advance
   B) are registered with the federal regulatory authority
   C) are determined by the contributions into the plan and their earnings
   D) are government administered
   Answer: C
   Diff: 1 Type: MC Page Ref: 278
   Skill: Recall
   Objective List: 12.2 Understand the key aspects of pension funds

   
   


6. 
   

   A defined-contribution plan ____.
   A) borrows from the public
   B) purchases foreign currency
   C) sets future income payments in advance
   D) makes periodic payments for a specific period of time
   Answer: D
   Diff: 1 Type: MC Page Ref: 278
   Skill: Recall
   Objective List: 12.2 Understand the key aspects of pension funds

   
   


7. 
   

   The primary assets of a pension fund are ____.
   A) money market instruments
   B) bonds, stock and long term mortgages
   C) consumer and business loans
   D) bonds, stock and short term mortgages
   Answer: B
   Diff: 1 Type: MC Page Ref: 278
   Skill: Recall
   Objective List: 12.2 Understand the key aspects of pension funds

   
   


8. 
   

   Private pension plans ____.
   A) are different from RRSPs
   B) cannot be converted to annuity or a RRIF on retirement
   C) are voluntary, employer-sponsored plans
   D) are the same as RRSPs
   Answer: C
   Diff: 1 Type: MC Page Ref: 279
   Skill: Recall
   Objective List: 12.2 Understand the key aspects of pension funds