7. Pension fund management and asset allocation Which of the following are guidelines the corporation owning the pension fund specifies for the managing institution? Check all that apply. O A maximum rate of return on the overall portfolio The minimum acceptable quality ratings for bonds The minimum size of companies in which to invest O A desired minimum rate of return on the overall portfolio The maximum amount to be invested in real estate Private pension portfolios are dominated by common stock. By contrast, public pension portfolios are evenly invested in corporate bonds, stock, and other credit instruments. O True O False What are the benefits of a passive investment strategy? Check all that apply. Alignment with the board's recommended long-term investment allocation The minimum amount to be invested in real estate Transparency of the investment strategy O A maximum rate of return on the overall portfolio Why do the portfolio managers have an incentive to take more risk than is appropriate? O Managers are rewarded if the portfolio performs very well but are not penalized if the portfolio performs poorly. O Managers are not rewarded if the portfolio performs very well but are penalized if the portfolio performs poorly. O Managers are rewarded regardless of whether the portfolio performs poorly or very well. O Managers are penalized regardless of whether the portfolio performs poorly or very well. 7. Pension fund management and asset allocation Which of the following are guidelines the corporation owning the pension fund specifies for the managing institution? Check all that apply. O A maximum rate of return on the overall portfolio The minimum acceptable quality ratings for bonds The minimum size of companies in which to invest O A desired minimum rate of return on the overall portfolio The maximum amount to be invested in real estate Private pension portfolios are dominated by common stock. By contrast, public pension portfolios are evenly invested in corporate bonds, stock, and other credit instruments. O True O False What are the benefits of a passive investment strategy? Check all that apply. Alignment with the board's recommended long-term investment allocation The minimum amount to be invested in real estate Transparency of the investment strategy O A maximum rate of return on the overall portfolio Why do the portfolio managers have an incentive to take more risk than is appropriate? O Managers are rewarded if the portfolio performs very well but are not penalized if the portfolio performs poorly. O Managers are not rewarded if the portfolio performs very well but are penalized if the portfolio performs poorly. O Managers are rewarded regardless of whether the portfolio performs poorly or very well. O Managers are penalized regardless of whether the portfolio performs poorly or very well