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1Choose one of the following types of institutions is most likely to have a long investment time horizon and a high level of risk tolerance.

A. A bank.

B. An insurance company.

C. An endowment.


Solution: C

2Choose one of the following statement best describe the defined contribution pension plan?

A. The employer contributes to the employee's retirement account each period.

B. The plan sponsor promises a predetermined retirement income to participants.

C. The employee assumes the investment risk.

Solution: C

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