Which of the Following Statements Are True

question 37

Multiple Choice

Which of the following statements are true?
I. Catastrophe bonds may be used as a form of reinsurance.
II. Catastrophe bonds are structured so that if an insured event results in large losses for an insurer,the bond's required payments increase.
III. Buyers of catastrophe bonds benefit if the adverse event occurs.
IV. When issued,catastrophe bonds will have promised yields above the risk-free rate.

• A)I and II only
• B)I and IV only
• C)II and III only
• D)II and IV only
• E)III and IV only

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Definitions:

Pythagorean Theorem

A theorem that states that the square of the sides of a right triangle are equal to the square of the hypotenuse.

Hypotenuse

In a right-angled triangle, the longest side, which sits opposite the right angle.

Opposite Side

In geometry, it refers to the side facing away in relation to another side, often in triangles or other polygons.

Hypotenuse

The longest side of a right-angled triangle, opposite the right angle.