The journey of me


Tuesday, February 24, 2015

FIN307 QUIZ3

Q: All of the following are methods used by insurance companies to reduce objective risk except:
A: safety education programs.

Q: A person who saves money for the future by buying a whole life policy
A: is able to accumulate tax-free interest earnings on cash values.

Q: Insurance companies have to deal with the concept of adverse selection, which is
A: high-risk persons are more likely to purchase insurance.

Q: Life insurance companies tend to be larger than casualty insurance companies because of
A: the long-term, accumulative nature of whole life policies.

Q: A person who saves money for the future by buying a whole life policy
A: is able to accumulate tax-free interest earnings on cash values.

Q: The post WWII international monetary agreement that was developed in 1944 is known as the
A: Bretton Woods Agreement

Q: A Singapore bank loan to a Vietnamese manufacturer payable in dong (the Vietnamese currency) accepts which risks?
A: all of the listed choices

Q: International participation loans is a method of reducing the ............. risk of an international lender.
A: credit

Q: Which of the following does not cause country risk to increase?
A: elimination of currency controls.

Q: Which one of the following combinations of pension terms offers the greatest protection for the future retiree?
A: insured, fully funded, vested

Q: In its absolute version, purchasing power parity states that price levels worldwide should be ................ when expressed in a common currency.
A: equal

Q: If the cost of yen per dollar changes from 100 to 110 yen per dollar,
A: The dollar has appreciated against the yen.

Q: Purchasing insurance may alter the behavior of the insured and is known as
A: moral hazard and adverse selection.

Q: Which one of the following economic conditions is best suited for the sale of whole life contracts?
A: low inflation (3%) with stable economic growth (4%)

Q: A noninsured pension plan will
A: be managed by an appointed trustee to invest funds contributed for the benefit of future pensioners.

Q: A bank's international loan diversification is enhanced if the historic realised rates of return on loans from loan applicant, Country A, have
A: a negative correlation with the loan returns on the bank's international loan portfolio.

Q: The largest amount of pension assets are associated with
A: trusteed, private pension funds.

Q: All of the following are techniques reducing credit risk in international lending except
A: making floating-rate loans as opposed to fixed-rate loans.

Q: Under the classic gold standard, if prices began rising in the U.S.
A: gold would flow out of the U.S. and the U.S. money supply would drop

Q: Differentiate between public and private pension funds. Private pension plans are
A: pensions provided by and to non-governmental, private sector businesses, organisations, and their workers.

RESULTS: 95/100

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