Key Considerations for Pension Funds

Very Easy Institutional Portfolio Mgmt Pension Funds

Pension funds are significant institutional investors with unique characteristics and goals. One of their primary objectives is to meet the long-term liability obligations to beneficiaries. Generally, pension funds invest in a diversified portfolio to manage risk while aiming to achieve a target return.

Which of the following is MOST likely a key consideration for a pension fund when formulating its investment strategy?

The need to maximize short-term profits regardless of volatility.

The long-term nature of their liabilities and the required rate of return.

The focus primarily on alternative investments to enhance returns.

Hint

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