a) Briefly describe the three elements of the portfolio management process. Why is it important that one follow this process? Explain.

b) Compare and contrast Defined Benefit and Defined Contribution Pension plans. Why is there a decline in number of firms offering DB plans as a benefit to their employees? Why is it difficult to have a clear investment policy for a labor union sponsored DB plan? Explain.

c) Briefly describe the three psychological traps when making market forecast as well as one more other challenge that you can face when preparing to make forecast. Be sure to include how you would avoid these issues.