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LOS a: Compare and contrast funding shortfall and asset/liability mismatch as sources of risk faced by pension plan sponsors.
Q1. Which of the following statements regarding sources of risk to the firm is most accurate?
A) Both asset liability mismatches and funding shortfalls are equal sources of risk for firms.
B) A funding shortfall is considered to be a bigger source of risk to the firm than an asset liability mismatch.
C) An asset liability mismatch is considered to be a bigger source of risk to the firm than a funding shortfall.
Q2. Which of the following statements is least accurate regarding the problems associated with an asset/liability mismatch and funding shortfall?
A) Asset/liability mismatch is a bigger problem than funding shortfall because the risk due to the pension assets being invested in equities does not appear on the balance sheet.
B) Funding shortfall is a bigger problem than an asset/liability mismatch because most firm's pension plans are underfunded.
C) The asset/liability mismatch is a bigger problem because the size of many firm’s pension assets is larger than the overall market capitalization of the firm.
Q3. Which of the following statements regarding a funding shortfall is most accurate? A funding shortfall is when the:
A) present value of pension assets is less than the present value of pension liabilities.
B) market value of pension assets is less than the market value of pension liabilities.
C) pension assets on the balance sheet are less than the pension liabilities on the balance sheet. | 
发表于 2009-3-5 11:36
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