Explanation:
The correct answer is B.
Surplus = $10,000
Surplus = Surplus × (1 + expected growth) = $10,000 × (1 + 5%) = $10,500
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Q.2491 A pension fund has $100,000 in assets and $90,000 in liabilities. Assume that the surplus is expected to grow at a rate of 5% per year, and the annual VaR of the surplus is 22% at the 99% confidence level.
The expected surplus after one year is equal to:
A
$10,000
B
$10,500
C
$5,000
D
$25,000
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