1. Which of the following trades will re-balance a bond mutual fund within a 401K portfolio given the following information:
Current Total 401K Portfolio Market Value = $1,138,881
Current Bond Mutual Fund Market Value = $754,398
Target Bond Mutual Fund Allocation = 75%
Current Bond Mutual Fund NAV = $47.21 per share
A. Buy 2,113 bond mutual fund shares
B. Buy 8,144 bond mutual fund shares
C. Sell 6,031 bond mutual fund shares
D. Sell 8,144 bond mutual fund shares
2. All of the following are advantages to defined benefit plans except?
A. Employees do not pay tax on distributions
B. Employer
C. Employee benefit payments are not directly dependent on investment earnings
D. Employee is entitled to vested interest if they leave company