Which of the Following Is True of Insurance

question 60

Multiple Choice

Which of the following is true of insurance?

• A) Customers are faced with limited options in choosing life, hospital or auto insurance.
• B) Insurance companies may offer a full range of financial services, including auto loans, mortgages, mutual funds and certificates of deposit.
• C) Distribution of insurance services has been steadily declining.
• D) The insurance industry excludes the use of intermediaries to distribute its services.

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Definitions:

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project, calculated by discounting future cash flows to their present value and subtracting the initial investment.

IRR

Internal Rate of Return; a metric used in capital budgeting to estimate the profitability of potential investments.

MIRR

Modified Internal Rate of Return, a measure used in capital budgeting to estimate the profitability of potential investments.

NPV

Net Present Value, a calculation used to determine the present value of an investment's cash inflows and outflows over time.