Which of the Following Would Not Be a Reason Influencing

question 53

Multiple Choice

Which of the following would not be a reason influencing whether or not an insurance company provides insurance?

• A) The size of the pool
• B) The current market interest rate
• C) Whether or not the losses are independently distributed
• D) Whether or not the losses can financially ruin the insurance company

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Definitions:

Trading Securities

These are debt or equity securities that are purchased primarily for selling in the near term with the intent of generating short-term profits.

Held-to-maturity Securities

Debt securities which a company has the positive intent and ability to hold until maturity.

Debt Securities

Financial instruments representing money borrowed that must be repaid, typically with interest, such as bonds, bills, or notes.

Equity Securities

Equity securities are financial instruments that represent ownership in a company, such as stocks, giving holders the right to a proportion of the company’s profits.