Pension plans can be thought of as the opposite of life insurance because life insurance:
A. pays off when you die while the pension plan pays off if you don't.
B. costs far more than pension plans.
C. pools the savings of many and pension plans do not.
D. companies spread risk while pension plans are only spread within the company.
Answer: A
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This year, on advice from your sister, you bought tobacco company stock at $50/share. During the year, you collected an $8 dividend, but due to the company's losses in medical lawsuits its stock fell to $40/share
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