Answer:
B. It would increase each year by 3 percent.
Explanation:
Given
Pension = $50,000 in first year
Increment = 5%
Inflation = 2%
Inflation doesn't only affect the value of an investment, it also influence the liabilities of a pension fund.
Consider a pension plan which gives a worker a benefit based on final average salary; A slight increase in the inflation would reduce the worker's real benefits in the years after retirement.
So, instead of Terry's pension to increase by 5% each year,
It'll increase by 3%
This is calculated by subtracting the inflation rate from the real increment rate.
5% - 2% = 3%
Answer:
a
Explanation:
In the realm of accounting, the Owner, Capital is the account that increases with a credit. This is a reflection of increased business value through investment, asset acquisition, or net income. Other accounts listed either increase with a debit or decrease with a credit. Option A is correct.
In the double-entry bookkeeping system, accounts are either increased with a debit or a credit. The account that increases with a credit among the options provided is Owner, Capital. This is because it reflects the owner's investment into the business, an increase in business assets, or an increase in net income, all of which increase the value of the “Owner, Capital” account. In contrast, Prepaid Expenses and Accounts Receivable increase with a debit, while Owner, Withdrawals decrease with a credit.
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B) Stocks allow investors to own a portion of the company; bonds are loans to the company.
C) Stocks pay interest to investors throughout the year; bonds only pay interest at fixed times during the year.
D) Stocks are a more reliable investment; bonds tend to be more volatile.
The difference between stocks and bonds is B) Stocks allow investors to own a portion of the company; bonds are loans to the company.
Stocks are a type of security that represents ownership in a company. When you buy a stock, you are essentially buying a small piece of the company. Bonds, on the other hand, are a type of debt security. When you buy a bond, you are lending money to the company or government that issued the bond.
As a result of this difference, stocks and bonds have different risks and rewards. Stocks are considered to be a riskier investment than bonds, but they also have the potential to generate higher returns.
Find out more on stocks and bonds at brainly.com/question/28813372
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