What Type of Institution Shares Risk with Its Policyholders in Return

question 121

Multiple Choice

What type of institution shares risk with its policyholders in return for payment of a premium?

• A) Trust company
• B) Schedule B Bank
• C) Credit union
• D) Pension fund
• E) Life insurance company

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Definitions:

Interest Rate

The percentage of principal charged by the lender for the use of its money or the return earned on deposit funds.

Consumption

The use of goods and services by households or individuals, typically measured to understand economic activity and consumer behavior.

Utility Function

A representation of a consumer's preferences, modelling satisfaction obtained from consuming goods and services.

Interest Rate

The percentage of a sum of money charged for its use, often expressed annually.