Reference no: EM133049285
1. Which of the following is not a way through which to adjust for overall investment uncertainties?
a. All of these are ways to adjust for overall investment uncertainties
b. Risk-adjusted projections.
c. Conservative projections of future returns.
d. Diversification.
e. Lower bond allocation.
2. Which of the following is not a disadvantage of personal savings using mutual funds?
a. Mandatory withdrawals and no overall tax shelter
b. Mandatory withdrawals
c. No overall tax shelter
d. No overall tax shelter and after-tax dollar contributions
e. After-tax dollar contributions
3. A qualified plan that places an amount of money in the pension regularly is a:
a. Qualified benefit plan
b. Defined benefit plan
c. Defined contribution plan
d. None of the choices are correct.
e. Qualified contribution plan
4. Which of the following is not a strategy through which a retiree can control inflation risk? Multiple Choice
a. Owning a home that one is willing to liquidate
b. Substantive concentrations in stocks
c. All of these are strategies through which a retiree can control inflation risk
d. Make inflation assumptions that are at the high end of the range
e. Inflation-indexed bonds
5. If tax-deferred annuities are not withdrawn at the time of your death, then:
a. All gains over original cost associated with tax-deferred annuities are subject to tax at ordinary income rates
b. None of the choices are correct.
c. All gains over original cost associated with tax-deferred annuities are taxable up to the amount contributed.
d. All gains over original cost associated with tax-deferred annuities are subject to 10% penalty
e. All gains over original cost associated with tax-deferred annuities are not taxable.
6. Which of the following is categorized as belonging to the human-related total portfolio asset category?
a. Defined benefit
b. Defined contribution
c. Annuity
d. None of the choices are correct.
e. Personal saving
7. Which of the following is not a feature of a defined benefit plan?
a. Taxation of Pension Payout of Original Deposit
b. Taxation of Pension Payout of Original Deposit and Typically Indexed for Inflation
c. Tax Deferral on Income and Capital Gains
d. Tax Deferral on Income and Capital Gains and Taxation of Pension Payout of Original Deposit
e. Typically Indexed for Inflation
8. Which of the following is a weakness of a traditional annuity?
a. You cannot outlive your annuity payments and a payout guarantee from a company which itself is subject to bankruptcy risk
b. You cannot outlive your annuity payments
c. Lack of liquidity once you annuitize
d. A payout guarantee from a company which itself is subject to bankruptcy risk and lack of liquidity once you annuitize
e. A payout guarantee from a company which itself is subject to bankruptcy risk
9. Which of the following is not a goal of the Social Security system?
a. To minimize the riskiness of pension investments
b. To provide retirement payments to individuals based on their contributions
c. All of these are goals
d. None of these are goals
e. To redistribute income so that all workers may retire at a minimum standard of living
10. What is the major difference between pre- and post-retirement planning?
a. None of these are major difference
b. The opportunity to enhance cash inflows is limited or nonexistent post-retirement
c. All of these are major differences
d. Individuals tend to have more cash available than expected post-retirement
e. Post-retirement planning is primarily focused are largely focused on revenues