7. Pension fund management and asset allocation When defined-benefit pension plans are managed by life insurance companies, a portion of its assots is maintained as equities, whereas the pension plan contributions are mostly kept in Public pension portfolios are dominated by common stock. By contrast, private pension portfolios are evenly invested in corporate bonds, stock, and other credit instruments. True Faise Which of the following is a passive investment strategy? Check all that apply: Investment in indexed mutual funds Hedging pension fund pertfollo risk Investing to achieve the highest possible return Investment in equity portfolio indexes Targeting a maximum of 2% retum on investment Why do the portfolio managers have an incentive to take more risk than is appropriate? Managers are rewarded regardless of whether the portfolio performs poorly or very well. Managers are penalized regardless of whether the portfollo performs poorly or very well. Managers are rewarded if the portfolio performs very well but are not penalized if the portfolio performs poorly. Managers are not rewarded if the portfolio performs very well but are penalized if the portfolio performs poorly