40 In a plan employees may choose A defined benefit the asse

40) In a plan, employees may choose A) defined benefit, the assets they invest in . B) defined benefit, the bencfits received during retirement C) defined contribution, the assets they invest in D) defined contribution, the bencfits reccived during retirement 41) As price levels the value of money A) rise, decreases B) rise, increases C) decline, decreases decline, stays the same Mortgages carry an uncertain flow of cash because A) borrowers often default on home loans B) mortgages are short-term debt instruments C) homeowners often prepay their mortgage loans lenders cannot legally fix interest rates 43) The primary goal portfolio diversification is to A) reduce risk By increase interest income increase capital gains D) eliminate all risks 44) Excess reserves immediately decrease if A) reserve requirements increase B) reserve requirements decrease C) the discount rate increases D) the discount ratc decrcases 45) Inflation is A) a decrease in the average price level B) a change in relative prices of goods an increase in the average price level a situation when the price of necessi ties rises DJ 46) A put option gives the owner the A) right to sell the underlying asset at a fixed price B) right to buy the underlying asset at a fixed price C) obligation to sell the underlying asset at a fixed price D) obligation to buy the underlying asset at a fixed price 47) A \"Jumbo\" CD is one in excess of A) S1,000 B) $10,000 C) 550.000 D) $100,000

Solution

Answer 40. b)

A defined benefit plan guarantees a specific benefit/payout on retirement.

The venture may be a set amount or maybe calculated according to a formula that takes in to account years of servicE, average salary and age.