ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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pension fund
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credit union fund
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insurance fund
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mutual fund
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Detailed explanation-1: -Pension funds are pooled monetary contributions from pension plans set up by employers, unions, or other organizations to provide for their employees’ or members’ retirement benefits. Pension funds are the largest investment blocks in most countries and dominate the stock markets where they invest.
Detailed explanation-2: -Pension funds are financial intermediaries which offer social insurance by providing income to the insured persons following their retirement. Often they also provide death and disability benefits.
Detailed explanation-3: -Until relatively recently, pensions funds invested primarily in stocks and bonds, often using a liability-matching strategy. Today, they increasingly invest in a variety of asset classes including private equity, real estate, infrastructure, and securities like gold that can hedge inflation.
Detailed explanation-4: -For example, the nation’s largest pension plan, the California Public Employees’ Retirement System (CalPERS), pays 2% per year in many instances. 5 In that case, an employee with 35 years of service and an average salary of $50, 000 could receive $35, 000 annually.