Which of the Following Statements Is FALSE

question 41

Multiple Choice

Which of the following statements is FALSE?

• A)Insurance is a branch of contract law.
• B)If you contract with a company to pay you in the event of a loss, you are the insured.
• C)An insurer pays a premium for coverage under an insurance policy.
• D)Some forms of insurance are compulsory.
• E)All of the above are true.

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Definitions:

Pretax Return

The income or profit earned by a business before the deduction of tax.

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time, used to assess the profitability of an investment.

Annual Cash Savings

The amount of money saved over the course of a year as a result of cost-cutting measures, efficiency improvements, or other savings opportunities.

Discount Rate

The interest rate used to discount future cash flows to their present value, thereby reflecting the time value of money.