_____ Can Be Both an Advantage and a Disadvantage of Universal

question 102

Multiple Choice

_____ can be both an advantage and a disadvantage of universal life insurance.

• A) Flexible premiums
• B) Tax features
• C) High returns
• D) Unbundling premiums
• E) Underwriting

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Definitions:

Diversification

An investment strategy that involves spreading investments among various financial instruments, industries, or other categories to minimize risk.

Diversifiable Risk

The risk that can be reduced or eliminated from a portfolio through diversification, as opposed to non-diversifiable risk.

Rational Investor

An individual who makes investment decisions based on logical analysis, aiming to maximize returns while minimizing risks.

Security Market Line

Represents the relationship between the risk of an investment and its expected return, illustrating the risk-return trade-off in capital market theory.