Practice Exam 6 Q8B

Why, using a cost of living adjustments in payouts, current retirees are mimicked with 100% nominal? not 100% real rate bonds?

And why deferred retirees and active accrued is mimicked with 100% real not 100% nominal?

The CFAI EOC question 2 has a totally different answer

Anyone can help here?


I remember thinking the same thing. Sorry, I don’t have an answer for you as I encountered the same problem

Hello, anyone knows

Retirees/Deferred/ Accrued hedged with what?

This subject has confused me several times - anyone have a good way of explaining what to use when?

In this case they state that they’ve changing to include cost of living adjustments for future retirees so that part makes sense to me, but what are the %s used for future inflation and wage growth?

Is active accrued 100% real bc they will peg future payments to cost of living or bc they are active still?