21.During the liquidation or distribution period, annuity units are exchanged for: Select one: a. preference shares. b.

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Question:

21.During the liquidation or distribution period, annuity units are exchanged for:

Select one:

a. preference shares.

b. unit plans.

c. dollar value of annuity.

d. accumulation units.

e. stock options.

22.Identify the risk seeker.

Select one:

a. An employee, selecting a health insurance plan

b. An employee, who is neither interested in insurance nor in stocks.

c. A college student, taking a summer job to pay for tuition.

d. A retiree, living on fixed income, purchasing a dividend-earning security

e. A retiree, living on fixed income, purchasing a lottery ticket.

23.Reserving liabilities involves the calculation of the amount that the insurer needs to set aside to pay future claims. The investment side includes decisions about asset allocation to achieve the best rate of return on the assets entrusted to the insurer by the policyholders seeking the security. The allocation of assets is necessary to meet the timing of the claims obligations. This activity is called:

Select one:

a. asset-liabilities matching.

b. redlining.

c. due diligence.

d. blockbusting.

e. gentrification.

24.The preferences a risk neutral individual can be captured in E(U) theory by:

Select one:

a. a circular utility function.

b. a linear utility function.

c. a convex utility function.

d. an exponential utility function.

e. a concave utility function.

25.Insurance policies are contracts of adhesion. Which of the following statements best explains this phrase?

Select one:

a. Insurers take full responsibility of the information provided by the insureds during the formation of the contract.

b. Insureds have no input in the design of a policy's terms.

c. After the insurance policy is in force, it cannot be cancelled or terminated until the contract period expires.

d. The insurer cannot void a contract, on the grounds of misrepresentation, after two years, even if it was a major fraud.

e. In case of a dispute, the court will read the contract as an insured would, and give decisions based on what the insured would understand after reading the contract.