Disadvantages of the Capital Retention Approach Include Which of the Following

question 28

Multiple Choice

Disadvantages of the capital retention approach include which of the following?
I.Assets are often liquidated too quickly.
II.It underestimates the amount of life insurance needed.

• A)I only
• B)II only
• C)both I and II
• D)neither I nor II

---

Definitions:

Semi-Annually Compounded

Interest on an investment or loan that is calculated and added to the principal balance twice a year.

Quarterly Compounded

Interest is added to the principal every three months, with subsequent interest calculations based on the resulting total.

GIC

A Guaranteed Investment Certificate (GIC) is a type of Canadian investment that offers a guaranteed return over a fixed period.

Monthly Compounded

Interest on an investment or loan is calculated monthly and added to the principal, allowing the interest to earn interest in subsequent months.