SOLVED

21) Suppose a new employee is promised a pension payment of $8000 in the twenty-fourth year after joining the firm. The current pension contribution is $2000 a year. Assuming a six percent rate of return, this pension plan is said to be A) fully funded. B) partly funded. C) unfunded. D) fully vested. 22) The problem of vesting and funding are avoided by __________ pension plans. A) both defined benefit and defined contribution B) defined benefit C) defined contribution D) neither defined benefit nor defined contribution 23) __________ contributions to a defined __________ pension plan are tax-deferred until retirement. A) Employer; benefit B) Employer; contribution C) Employee; benefit D) Employee; contribution 24) Pension funds are partially guaranteed by the A) Social Security Administration. B) Federal Deposit Insurance Corporation. C) Federal Reserve. D) Pension Benefit Guaranty Corporation. 25) By requiring minimum reporting, disclosure, vesting, funding, and investment standards, the __________ helps safeguard employee pension rights. A) Employee Retirement Income Security Act B) Federal Deposit Insurance Corporation C) Social Security Act D) Federal Reserve 26) Compared with the average man, the average woman pays A) less for health insurance but more for life insurance. B) less for life insurance but more for health insurance. C) more for life and health insurance. D) less for life and health insurance. 27) Because women have a longer average life span than men, they pay A) more for health insurance. B) less for health insurance. C) more for life insurance. D) less for life insurance. 28) Because women have a longer average life span than men, they are paid A) higher monthly retirement benefits by a defined benefit pension plan. B) lower monthly retirement benefits by a defined benefit pension plan. C) the same monthly retirement benefits by a defined benefit pension plan. D) the amount of monthly benefits paid to men and women by a defined benefit plan is determined by each company. 29) Which of the following types of insurance do men pay lower premiums than do women? A) life insurance B) health insurance C) auto insurance D) There are no legally allowed differences. 30) Property and casualty insurance companies are supervised and regulated by the A) Federal Home Loan Bank Board. B) Securities and Exchange Commission. C) states in which they operate. D) Federal Reserve. 31) Relative to life insurance companies, the liabilities of property and casualty insurance companies are A) longer-term. B) more unpredictable. C) less risky. D) subject to higher taxes. 32) The portfolios of property and casualty insurance companies are generally concentrated in A) liquid assets. B) mutual funds. C) primary securities. D) U.S. Treasury bonds. 33) Property and casualty insurance companies tend to invest heavily in municipal bonds because A) the bonds have higher yields than corporate bonds. B) property and casualty insurance companies are required by regulators to hold at least 20 percent of their assets in the form of municipal bonds. C) the bonds are tax-exempt. D) they hold large state and local government pension funds, thus requiring them to hold an equal amount of municipal bonds. 34) In dollar terms the most important of all forms of property and casualty insurance is A) automobile liability insurance. B) home owners insurance. C) medical malpractice insurance. D) fire insurance. 35) A portfolio manager for a property and casualty insurance company who anticipates a recession is likely to shift the company’s portfolio into A) short-term securities. B) preferred stock. C) common stock. D) long-term corporate bonds.