"An Agreement to Pay a Premium to a Company in Return

question 87

Multiple Choice

"An agreement to pay a premium to a company in return for a guarantee of financial benefits in the event of an undesired circumstance" defines

• A)Social insurance
• B)Private insurance
• C)Private investment
• D)Asset management
• E)Retirement savings

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Definitions:

360-Day Year

An accounting convention that simplifies interest calculations by assuming there are 360 days in a year.

Note Payable

A financial obligation or loan evidenced by a written promissory note specifying payment terms.

Discounted Note

A promissory note whose proceeds are issued at a price lower than its face value, with the difference compensating the lender for risk.

360-Day Year

An accounting convention that simplifies interest calculation by assuming all months have 30 days, resulting in a 360-day year.