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    Question

    Which of the following statements is true about pension funds?

    1)    Pension funds are managed by the government and are only available to government employees.

    2)    Pension funds invest in a variety of assets such as stocks, bonds, and real estate.

    3)    They can be set up by employers or employees.

    A 1 and 2 only Correct Answer Incorrect Answer
    B 1 and 3 only Correct Answer Incorrect Answer
    C 2 and 3 only Correct Answer Incorrect Answer
    D 1, 2 and 3 Correct Answer Incorrect Answer
    E 3 only Correct Answer Incorrect Answer

    Solution

    Statement 1 is incorrect. Pension funds are not managed by the government alone. They are set up by employers and/or employees or by a combination of both, and managed by professionals who are responsible for investing the contributions made by employees in a range of assets. The government may regulate pension funds to ensure they are operating in accordance with certain rules and guidelines, but they are not exclusively available to government employees.   Statement 2 is correct. Pension funds invest in a variety of assets, such as stocks, bonds, and real estate, in order to grow the funds and provide a return for retirees. The types of assets in which pension funds invest may vary depending on the investment strategy, risk tolerance, and investment goals of the fund.

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