Question

1. Which of the following is the major advantage of term insurance relative to life insurance policies like whole life and universal life that build up cash values?

a. No need for a physical examination when renewing

b. Constant price across a person's lifetime

c. Readily convertible to cash

d. Provides a greater choice of investments

e. Has lower initial premiums

2.Which of the following betas probably indicates a speculative stock that is more risky and volatile than a broad market index of similar investments?a

a. -1.0

b. 0

c. 0.5

d. 1.0

e. 2.0

3. Changes in the value (or price) of a bond correspond most closely to changes in which of the following economy-wide factors

a. Unemployment rate

b. Interest rates

c. Balance of trade with foreign countries

d. Federal budget surplus or deficit

e. Control of Congress by Democrats or Republicans

Answer 1

Q1) e) Has lower initial premiums

Explanation: Term insurance has lower initial premium has it is for a particular period and does not involve any cash value.

Q2) e) 2

Explanation: When the beta is more than 1 , then the stockvis more riskier than market as it has higher systematic risk.

Q3) b) interest rates

Explanation: Interest rates are inversely related to bond prices and value . As the interest rate increases the bond prices decreases and vice versa.