Q: If the market risk premium were to increase, the value of
If the market risk premium were to increase, the value of common stock (everything else being equal) would a. Not change because this does not affect stock values. b. Increase in order to compensate t...
See AnswerQ: Which of the following are non diversifiable risks? 1.
Which of the following are non diversifiable risks? 1. Business risk. 2. Management risk. 3. Company or industry risk. 4. Market risk. 5. Interest rate risk. 6. Purchasing power risk. a. 1 and 3 only...
See AnswerQ: Modern “asset allocation” is based upon the model developed by
Modern “asset allocation” is based upon the model developed by Harry Markowitz. Which of the following statements is/are correctly identified with this model? 1. The risk, return, and covariance of as...
See AnswerQ: A client has a $1,200,000 portfolio consisting
A client has a $1,200,000 portfolio consisting of the following four stocks: 1. $300,000 ABC @ 1.1 beta. 2. $225,000 RTR @ 0.7 beta. 3. $405,000 XYZ @ 0.3 beta. 4. $270,000 PDQ @ 1.3 beta. What is the...
See AnswerQ: A young, single client approaches a CFP® professional with $
A young, single client approaches a CFP® professional with $5,000 stating that he would like to develop a financial plan and invest in the market. This is his first experience investing and he like he...
See AnswerQ: Regarding the characteristics of insurance, which of the following is/
Regarding the characteristics of insurance, which of the following is/are fundamental? 1. Probability (possibility and predictability of a loss). 2. Law of large numbers. 3. Transfer of risk from indi...
See AnswerQ: What is the main responsibility of the underwriting department of a life
What is the main responsibility of the underwriting department of a life insurance company? a. To guard against adverse selection. b. To set a limit on the amount of insurance issued. c. To set adequa...
See AnswerQ: Veronica recently purchased a car for $1,500 for her
Veronica recently purchased a car for $1,500 for her 16-year-old child. Which of the following risk management techniques would be most appropriate for handling the collision exposure of this automobi...
See AnswerQ: Billy is considering enrolling in an MBA program. It would cost
Billy is considering enrolling in an MBA program. It would cost him $22,000 a year for two years. He believes it would raise his salary, which is now $50,000 a year, by the following amounts: Year ……...
See AnswerQ: Which of the following best describes the difference between a variable life
Which of the following best describes the difference between a variable life policy and a universal life policy? a. Variable life has a variable death benefit and universal life has a fixed death bene...
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