Bill,a Professional Hockey Player,is Upset When He Discovers That His

question 10

Multiple Choice

Bill,a professional hockey player,is upset when he discovers that his twin brother,a grade school PE teacher,pays 50% less for disability insurance than he does.What is the most likely explanation for this difference?

• A)Bill's policy is with a different insurance company.
• B)The likelihood of a disabling injury is greater for Bill than his brother.
• C)Bill's brother is healthier than Bill.
• D)The law of large numbers establishes that Bill and his brother have similar risks over a given period of time.

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Definitions:

Tax Exempt

Income or transactions that are free from tax at the federal, state, or local level.

Gain/Loss

The financial result that occurs when the selling price of an asset is higher or lower than its purchase price.

Straight Line Basis

A method of calculating depreciation and amortization that allocates an equal portion of an asset's cost to each period in its useful life.

Salvage Value

The estimated value that an asset will realize upon its sale at the end of its useful life.