What is considered “one reason” for the essay portion? The guideline answer seems to give many reasons, but since time is at a premium during the exam how much do you need to write to get full credit? For example, if it asks whether defined benefit plans or endowments can generally take on more risk and justify with one reason. Would “DB benefit plans have contractual liabilities unlike foundations” be good enough, or would you need to explain it further?
I would write something like this: endowments can take on more risk - because they have no defined spending requirements - while DB Plans need to build up a reserve for future benefit payments. More reserves a DB plan builds up - there would be fewer contributions from employer needed in the future.
be sure to give a definitive answer in the very beginning, like CP did above. do not be vague
Your answers can be short, but you need to be “to the point”.
My question related to this is what is too little. It seems to me the more I justify and answer the more likely I am to make a stupid incongruous statement… Would “endowments can take on more risk” “because they have no defined spending requirements” Have been enough?