1. The direct transfer of funds ______.

is very efficient

increases the cost of obtaining funds

is the best method to enhance economic growth

2. Which of the following statements about pensions over time is (are) TRUE?

I. The return requirement and discount rate for plan assets have both been decreasing

II. In terms to total AUM, the popularity of DB plans have been declining relative to DC plans

III. Allocation to alternative investments has been increasing

A. I

B. II

C. I, III

D. II, III

E. All of the statements

(Please explain answer or show work)

3. When forecasting stock market returns, the Grinold-Kroner model specifically accounts for all of the following except:

A. An increase in nominal corporate earnings growth

B. An increase in real corporate earnings growth

C. A decrease in buyback yield (or a decrease in shares outstanding)

D. Expectations of P/E compression or expansion

E. Consumer confidence levels

(Please explain answer)