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Category: Finance
Solutions to Pension Underfunding As a consultant to a state's underfunded pension fund, you have been asked to search for solutions to prevent underfunding in the future. a. One explanation for the underfunding of the defined-benefit plan is that the economy was weak recently, so financial markets were weak, and this caused the underfunding. If so...
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Category: Finance
Interpret the following statements made by Wall Street analysts and portfolio managers. a. "The city is now broke because of its pensions." Interpret the following statements made by Wall Street analysts and portfolio managers. b. "Defined-contribution plans would prevent politicians from buying votes in a state." Interpret the following statements...
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Category: Finance
Aligning Incentives of Pension Funds Consider a state pension fund that needs to generate a series of fixed payments for its retirees. Assume that the compensation of the fund's portfolio managers is tied to the return earned on the investments each year. Write a short essay that explains how the compensation plan might lead to investment strategie...
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Category: Finance
Potential Corruption of Pension Fund Trustees Explain the potential for corruption when a trustee has the power to determine who will manage a pension fund.
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Category: Finance
Potential Impact of an Underfunded Public Pension Fund on Debt Explain how an underfunded public pension fund can affect the debt rating of a city or state.