1. If you are promised a nominal return of 12% on a one year investment, and you...

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1. If you are promised a nominal return of 12% on a one year investment, and you expect the rate of inflation to be 3%, what real rate do you expect to earn?

2. A positive aspect of defined-benefit plans is that

(a) They are more transferable than defined-contribution plans.
(b) They generally permit earlier vesting than defined-contribution plans.
(c) The funds are out of reach of corporate creditors.

3. The type of employer pension plan in which the benefit is determined by a formula that generally includes the worker's average pay and the number of years worked for the company is called a _____ plan.

(a) Defined-contribution
(b) Defined-benefit
(c) Contributory
(d) Noncontributory

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Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

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