The Two Major Asset Classes in Which Life Insurers Invest

question 172

Multiple Choice

The two major asset classes in which life insurers invest are:

• A) annuities and bonds
• B) mortgages and annuities
• C) bonds and investments
• D) bonds and mortgages

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Definitions:

Operating Profit

Earnings before interest and taxes (EBIT), representing the profit a company makes from its operations after subtracting operating expenses from revenue.

Sales Mix

The proportion of different products or services that make up the total sales of a company.

Unit Contribution Margin

The amount each unit sold contributes to covering fixed costs and generating profit, calculated by subtracting variable costs per unit from the selling price per unit.

Break-Even Point

The financial point at which total revenues equal total costs and expenses, resulting in no net loss or gain.