CFA Practice Question

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CFA Practice Question

Social security payments have been adjusted for inflation annually since the late 1970s yet it is sometimes argued that the cost of living for retirees on social security rises less than the cost of living adjustment used by the government. If this is the case, ______
A. retirees are hurt by inflation even with the government's inflation adjustment.
B. retirees benefit from using the government's cost of living adjustment rather than a more accurate cost of living adjustment.
C. retirees would be better off if the government cost of living adjustment more accurately reflected the true cost of living for retirees.
Explanation: If social security payments more than keep pace with the true cost of living, retirees will be better off.

User Contributed Comments 1

User Comment
danlan Since the cost of living adjustment is more than the real cost rise, retirees benefit from that.
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