Which of the Following Statements About Risks Is True

question 2

Multiple Choice

Which of the following statements about risks is true?

• A) Investing in a utility company that supplies power to customers, who have few alternative sources of power, can be very risky.
• B) Investors take up risks every time when they are not sure if their investments will be a gain or a loss.
• C) Investing in a stable firm is generally considered very risky even if it has a long history of profitability.
• D) Investors face vey less risk when they put their money into start-up companies that try to launch products based on new technologies.

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Definitions:

Insurance Beneficiary

The individual, group, or entity designated to receive the proceeds or benefits from an insurance policy.

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The money paid by an insurance company to a claimant or policyholder in the event of a loss covered by the policy.

Incontestability Clause

A provision in a life insurance policy stating that after a certain period of time, the insurer cannot contest the statements in the application.

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A formal request for coverage submitted to an insurer, detailing the terms and conditions.