1.HPY is negative does not mean that ending value of the investment is negative Select one:...

1.HPY is negative does not mean that ending value of the investment is negative Select one:
True
False
2.Nominal Risk Free Rate investment is one which has one possible return which has a probability of 1.0
True
False
3.Some types of life insurance policy payments contribute towards increasing the amount of money you have for your retirement years Select one:
True
False

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Expert Solution

Answer:

1. TRUE
The investment value can be zero or greater than that but it can never be negative. A value less than 1 implies that there is a decline in wealth, which indicates that you have got a negative return. If an HPY is zero, it means that you have lost all your money.

2. TRUE
The nominal risk-free rate is the rate of return as it is quoted. It is not adjusted for the expected inflation. A riskfree investment should have returns that are uncorrelated with risky investments in a market.

3. TRUE
There are many life insurance policies in which you pay premiums now and can redeem them when you get retired. Some policyholders can get customized life insurance policies according to their needs.

jeff jeffy answered 1 year ago

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