pennyless

I agree with janakisri, but can't seem to make sense of the solution...


Solution to CFAI 2010 Mock Exam problem 3 Part B answer for CarbX Corp:

"The CarbX pension plan is frozen, so there is no need for equity. Because there is no inflation indexation, the accrued benefit liability is the ultimate liability of the plan. This liability can be mimicked entirely with nominal bonds. This is accomplished by a sale of equities and purchase of nominal bonds"