By Evan Inglis
Do you know what Treasury STRIPS are? Could you clearly explain what it means for a securities market to be "efficient"? Do you know how lump sum payments impact the duration of a pension plan?
You'll find answers to these questions and more by taking the Pension Finance Quiz!
The Pension Finance Task Force has developed a short quiz on the topics of:
Interest Rates [learn about Treasury STRIPS in this section]
Investment Theory [find out what an “efficient” market is in this section]
Investment Practice [see if you know about lump sums and duration in this section]
The quiz is intended to be a quick and fun way to familiarize yourself with important concepts that are useful to a pension consultant, but may not be part of your every day practice. Answers to the quiz questions include links to additional information on the concepts covered. Each of the three sections of the quiz will take about 15-20 minutes to complete, excluding time spent exploring the links included and thinking more deeply about the concepts. It's easy to do one section at a time and you can answer a few questions and come back later to finish up a section.
Here is the link to the quiz: SOA.org/professional-interests/pension/pen-finance-quiz
The Pension Finance Task Force (PFTF) is jointly sponsored by the Academy and the SOA and its SOA activities are overseen by the Pension Section Council. The mission of the PFTF is to study how basic principles of finance and economics can be incorporated into retirement actuarial practice and used to strengthen retirement systems; to educate actuaries, plan sponsors and other stakeholders on these principles, especially with regard to measuring and understanding risk, cost and value in retirement systems; and to provide and assist in formulating views based on sound economic principles for public statements by the profession.
Evan Inglis, FSA, CFA, is principal and chief actuary at Vanguard, Investment Strategy Group in Wayne, PA. He can be reached at r_evan_inglis@vanguard.com.