In defined benefit plan, employees assume the risks associated with changes in inflation and interest rates.Question 7Answera.FALSEb.TRUE

Which of the following is true of defined contribution plan?Question 4Answera.It provides an explicit benefit which is easily communicated.b.It is more favourable to long-service employees.c.It does not require managing of surplus or deficit in pension fund.d.It makes the employer accountable for the risks associated with changes in inflation and interest rates.e.It does not make employer costs known.

Question 12Under defined benefit plan:Answer :The employees’ benefits are unknown.    Actuarial valuation is unnecessary in accounting for the plan.  The plan asset and retirement benefit obligation belong to the employer.    The employer is not legally bound by the ultimate amount to be payable to the retiring employees.

The company could use interest rate options to set a floor to manage its interest rate risk this Statment Is True Or False?

True or False QuestionTrue or false: Interest rate risk is the result of changes in the interest rates in the economy.True false question.TrueFalse

Multiple Choice QuestionWhat risk is the result of changes in the interest rates of the economy?Multiple choice question.inflation riskcommon riskcapital gainsinterest rate risk