5. Assets of Life Insurance Companies What are the main assets of life insurance companies? Identify the main categories. What is the main use of funds by life insurance companies?

9. Managing Credit Risk and Liquidity Risk How do insurance companies manage credit risk and liquidity risk?

10. Liquidity Risk Discuss the liquidity risk experienced by life insurance companies and by property and casualty (PC) insurance companies.

16. PBGC What is the main purpose of the Pension Benefit Guaranty Corporation (PBGC)?

17. Defined-Benefit versus Defined-Contribution Plan Describe a defined-benefit pension plan. Describe a defined-contribution plan, and explain how it differs from a defined-benefit plan.

18. Guidelines for a Trust What type of general guidelines may be specified for a trust that is managing a pension fund?

21. Exposure to Interest Rate Risk How can pension funds reduce their exposure to interest rate risk?

8. Reform of Hedge Funds Explain how the Financial Reform Act of 2010 applies to hedge funds.

9. Tax Effects on Mutual Funds Explain how the income generated by a mutual fund is taxed when the fund distributes at least 90 percent of its taxable income to shareholders.

10. Performance According to research, have mutual funds outperformed the market? Explain. Would mutual funds be attractive to some investors even if they are not expected to outperform the market? Explain.

11. Money Market Funds How do money market funds differ from other types of mutual funds in terms of how they use the money invested by shareholders? Which security do MMFs invest in most often? How can an MMF accommodate shareholders who wish to sell their shares when the amount of proceeds received from selling new shares is less than the amount needed?

12. Risk of Money Market Funds Explain the relative risk of the various types of securities in which a money market fund may invest.

13. Interest Rate Risk of Funds Is the value of a money market fund or a bond fund more susceptible to rising interest rates? Explain.

14. Diversification among Mutual Funds Explain why diversification across different types of mutual funds is highly recommended.

15. Impact of Credit Crisis on Hedge Funds Explain why some hedge funds failed as a result of the credit crisis.

16. REITs Explain the difference between equity REITs and mortgage REITs. Which type would likely be a better hedge against high inflation? Why?