Which of the Following in Not True with Regard to a Straight

question 48

Multiple Choice

Which of the following in not true with regard to a straight whole life policy?

• A) The face amount of the policy will never be greater than the cash value.
• B) The savings pattern is actually the opposite of the protection pattern.
• C) When the insured dies, the beneficiary will always receive both the face amount of the policy and any accumulated cash value.
• D) A whole life policy may be thought of as a forced method of saving.
• E) As a policy nears the end of its period, more of the premium is allocated toward cash value accumulation than increasing the protection element.

---

Definitions:

Market Portfolio

A theoretical portfolio that contains every asset in the market, weighted by market capitalization.

Security Market Line

A graphical representation of the expected return of investments as a function of their risk, specifically their beta.

Expected Return

The average of all the possible returns for an investment, weighted by their respective probabilities.

Beta

A measure of a stock's volatility in relation to the overall market, used to gauge a stock's risk level relative to the market average.