Which of the Following Leads to the Payment of a Higher

question 5

Multiple Choice

Which of the following leads to the payment of a higher insurance premium by the potential insured?

• A) Job promotion
• B) High-paying career
• C) Obesity
• D) Childbirth in the family
• E) Marriage

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Definitions:

Effective Rate

The interest rate on a loan or investment, adjusted for the effect of compounding over a given period.

Compounded Quarterly

Generating interest on both the initial principal and previously earned interest every three months.

Annual Inflation Rate

The percentage increase in the price of goods and services over a one-year period, reflecting the decreasing purchasing power of a currency.

Purchasing Power

The measure of what one unit of currency can buy in terms of goods or services.