A Life Insurance Firm Wants to Minimize Its Interest Rate

question 26

Multiple Choice

A life insurance firm wants to minimize its interest rate risk and it is planning on paying out $250,000 in five years.Which one of the following investments best matches its goal?

• A) High yield utility stocks
• B) 5-year zero coupon bonds
• C) 10-year coupon bonds
• D) Money market investments rolled over as needed

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Definitions:

U-joint Working Angles

The operational angles at which universal joints efficiently transfer rotational power between shafts.

Full Rotation

The movement of an object in a circular path, completing 360 degrees around an axis.

PTO Driveshafts

PTO driveshafts, short for Power Take-Off driveshafts, are components used to transfer mechanical power from a vehicle, like a tractor, to another piece of equipment or machinery.

Solid Steel Stock

A form of steel material that is completely solid, used for a variety of industrial and construction applications.