Which of the Following Statements About Bearing Risk Collectively Is

question 44

Multiple Choice

Which of the following statements about bearing risk collectively is correct?

• A) Bearing risk collectively is not very cost-efficient.
• B) Bearing risk collectively only works for small groups.
• C) Bearing risk collectively is bearing risk as part of a large group.
• D) All of the above are correct.

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Definitions:

Present Value

The present value of a future amount of money or series of cash flows, based on a particular rate of return.

Future Cash Inflows

Projected cash earnings from investments, operations, or financial instruments over a specified future period.

Net Present Value

A method of evaluating the profitability of an investment by calculating the difference between the present value of cash inflows and outflows over a period of time.

Present Value

The value today of an anticipated sum of money or sequence of cash flows, when calculated with a certain return rate.