Which of the Following Describes a CAT Bond

question 14

Multiple Choice

Which of the following describes a CAT bond?

• A) Has a great deal of systematic risk
• B) Has very little systematic risk
• C) Has a moderate amount of systematic risk
• D) Has negative systematic risk

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Definitions:

Donor Retains Control

A situation where a donor gives a gift or assets but maintains a level of decision-making power or influence over those assets or their management.

Provision for Bad Debts

An accounting concept that represents an allowance for receivables that may not be collectible.

Uncollectible and Reduced Accounts

Refers to accounts receivable that a business deems unlikely to be collected and therefore reduces their value on the financial statements.

Donor Retains Power

In charitable giving, when the donor ensures some level of continued influence or control over the use or investment of the donated assets.