1. Describe the difference between pay-as-you-go financing for pension, as opposed to a method of financing that is actuarially sound in terms of ongoing sustainability of pension system.
2. List and discuss three reasons for the prevalence of in-kind transfer programs over comparable cash transfer schemes.
3. Based on next year’s dividend, the dividend yield of a stock is 5.5%. The dividend growth rate is assumed to be 4%. What is the required rate of return for the stock?