In 2012, the S&P 500 increased 16%. Given the low interest rate environment, many large companies had to pour billions of dollars into their pension funds. This example illustrates ________.

Question

Quizplus · Accepted Answer

The scenario describes a situation where companies had to adjust their pension fund contributions due to changes in interest rates, which is indicative of a duration mismatch between the assets and liabilities of the pension funds.

In 2012, the S&P 500 Increased 16