The Producer Price Index (PPI) measures inflation from the perspective of businesses (producers), reflecting the cost of goods before they reach consumers.
* Why PPI?
* It tracks wholesale prices and raw material costs.
* Helps predict future consumer price inflation (CPI).
* Difference Between PPI & CPI:
* CPI measures inflation from the consumer's perspective (retail prices).
* PPI measures inflation from the producer's perspective (wholesale prices).
# Reference: UK Office for National Statistics (ONS), CFA Institute (Inflation Indicators).

In an order-driven market, an electronic order book is used to match buy and sell orders based on strict price and time priority. This system ensures transparency and fair pricing since all orders are visible to market participants.

Standard deviation measures the volatility of returns, helping investors compare the risk levels of different portfolios or assets. A higher standard deviation indicates greater uncertainty in returns, which can signify higher risk.

* Yield to Maturity (YTM)
* YTM is the total return an investor can expect from a bond if held to maturity, considering annual coupon payments and any difference between the purchase price and the bond's face value.
* Why the Answer is D
* YTM incorporates all cash flows, providing a comprehensive measure of total return.
* Why Other Options are Incorrect
* A. Running Yield: Considers only current income relative to price, not total return.
* B. Annual Coupon: Ignores price changes and reinvestment potential.
* C. Price-to-Book Ratio: Unrelated to bonds, applies to equities.
* ICWIM Study Guide, Chapter on Fixed Income: Details YTM and its role in total return calculations.
* Bond Investment Literature: Highlights the comprehensive nature of YTM.
References

A Defined Contribution (DC) pension scheme is a retirement savings plan where contributions are invested, and the final pension depends on investment performance.
* Why is Option A Correct?
* The final retirement income is uncertain because it depends on investment returns, contribution levels, and annuity rates at retirement.
* Unlike Defined Benefit (DB) schemes, where retirees receive a fixed pension, DC schemes do not guarantee a set payout.
* How Defined Contribution (DC) Schemes Work:
* Contributions are made by employees (and often by employers).
* Funds are invested in stocks, bonds, or mixed assets.
* Upon retirement, the individual may withdraw lump sums, purchase an annuity, or opt for pension drawdown.
* Why Not Other Options?
* B (Employers never contribute) # Incorrect. Many employers do contribute, particularly in workplace pensions (e.g., auto-enrolment in the UK).
* C (Capital gains tax applies) # Incorrect. Pension funds grow tax-free (no CGT on gains).
* D (Employees always contribute more) # Incorrect. Employer contributions vary by scheme- some match employee contributions, others contribute less.
# Reference: UK Pensions Act 2008 (Auto-Enrolment), FCA Pension Regulations, CISI Wealth & Investment Management.