Using the Income Method and Employing a Factor of 10

question 49

Multiple Choice

Using the income method and employing a factor of 10, determine the amount of insurance a couple would need if their net income is $65,000, their assets total $280,000, their liabilities total $130,000, their two children's anticipated college education needs total $730,000, and their invalid mother's future nursing home expenses total $290,000.

• A) $2,850,000
• B) $1,500,000
• C) $650,000
• D) $730,000

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Definitions:

Regression

A statistical method used to model and analyze relationships between variables.

Obtained Value

The actual value or result achieved in an experiment or study, typically used in statistical analysis to compare against theoretical values.

Critical Value

The threshold value that the test statistic must exceed in order for the null hypothesis to be rejected in a hypothesis test.

Significance Level

The threshold chosen by the researcher for rejecting the null hypothesis; commonly set at 0.05 or 5%.