Which of the Following Statements About the Yearly-Rate-Of-Return Method (Also

question 21

Multiple Choice

Which of the following statements about the yearly-rate-of-return method (also known as the Belth method) of calculating the yearly rate of return for a life insurance policy is (are) true?
I.The formula requires the use of benchmark prices per $1,000 of protection.
II.The main drawback of the formula is its complexity,necessitating the use of a computer to calculate the rate of return.

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

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Definitions:

General Population

The total group of individuals from which any sample might be drawn, often referring to the entirety of a country's inhabitants.

Poverty Rate

A measure of the percentage of the population living below the poverty line, indicating the level of economic deprivation.

Discrimination Coefficient

A measure of the cost or disutility of prejudice; the monetary amount an employer is willing to pay to hire a preferred worker rather than a nonpreferred worker of the same ability.