Analysis Mastery Exam Flashcards
1
Q
Can universal life customers change their premium payments?
A
Yes; additional funds paid over the premium are invested in the companies general account and develop cash value; can be used to discount premium or buy additional coverage
2
Q
Does a seller of a futures contract agree to buy or sell at a certain price?
A
Sell
3
Q
What annuity payout options allows the full value of the investment to be credited to the estate?
A
Unit Refund Annuity
4
Q
Can a Subchapter S corporation offer anything besides common stock?
A
No
5
Q
Is contraction risk synonymous with call risk?
A
Yes
6
Q
What is Net present Value?
A
Sum of cash flows - cost of capital - initial investment
7
Q
What does net present value measure?
A
Value of future returns at todays rate; will be lower than nominal value always
