Which of the Following Needs to Be Purchased Yearly

question 93

Multiple Choice

Which of the following needs to be purchased yearly?

• A) Annual renewable term insurance.
• B) Term-life insurance.
• C) Cash-value life insurance.
• D) Level term insurance.

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Definitions:

Correlation

A numerical indicator that captures how much two variables move in tandem, showing both how strong their linkage is and in what direction it lies.

Risk-adjusted Discount Rates

Discount rates that are adjusted to reflect the risk of an investment, used in calculating the present value of expected future cash flows.

Unsystematic Risk

The risk associated with a specific company or industry, which can be reduced through diversification.

Diversifiable Risk

A type of investment risk that can be reduced or eliminated through the use of diversification strategies across different assets or asset classes.