1. Which of the following statements accurately describes a reason for the suitability of an asset...

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1. Which of the following statements accurately describes a reason for the suitability of an asset class in a qualified retirement plan portfolio? (Points : 3)
Mutual funds provide diversification and offer a competitive rate of return.
Money market investments provide liquidity and a high real rate of return.
Common stocks offer capital appreciation and are relatively low risk.
Bonds are useful for funding future fixed obligations and offer protection against inflationary pressures.
2. Joe (age 52) has just started a consulting company. He currently employs 6 people, who range in age from 22 to 31 years old. Joe estimates that the average employment period for his employees will be approximately 3 years and would like to implement a retirement plan that will favor older participants while including an appropriate vesting schedule. In addition, Joe would like the employees to bear the risk of investment performance within the plan. Which of the following plans is most appropriate for Joe's company? (Points : 3)
SEP plan
SIMPLE 401(k) plan
Target benefit plan
Cash balance plan

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Robert · Accepted Answer

1. Two bonds are selling at par value and each has 17 years to maturity. The first bond has a coupon rate of 6% and the second bond has a coupon rate of 13%. Which of the following is most false about the durations of these bonds? (Points : 4)
       The duration of the higher-coupon bond will be higher.
       The duration of the lower-coupon bond will be higher.

1. Which of the following statements accurately describes a reason for the suitability of an asset class in a qualified retirement plan portfolio? (Points : 3) Mutual funds provide diversification and...

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