The Most Valuable Single Technique in Personal Risk Management to Assist

question 103

Multiple Choice

The most valuable single technique in personal risk management to assist an individual in determining how much life insurance is needed is:

• A) computing the Human Life Value.
• B) using the probability of death each year,prevailing interest rates and assumed inflation rates to find the discounted present value of a future income stream.
• C) assessing the family's total economic needs and subtracting financial resources available to meet those needs.
• D) estimating the sum of money which,when paid in installments,will produce the same income as the person would have earned,after deducting assumed amounts for taxes and personal maintenance expenses.
• E) using a multiple-of-earnings adjusted for occupation.

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Definitions:

Variable Factory Overhead Controllable Variance

The difference between the budgeted variable overhead based on actual production activities and the actual variable overhead incurred.

Standard Labor Hours

Represents the predetermined amount of time expected to complete a specific task or produce a certain amount of goods under normal conditions.

Overhead

Indirect costs associated with running a business that are not directly tied to a specific product or service, such as rent and utilities.

Variable Factory Overhead Controllable Variance

The difference between the actual variable overhead costs incurred and the standard variable overhead expenses expected, which can be controlled or influenced by management.