問題一覧
1
What is a reverse mortgage?
A loan that provides payments to the homeowner based on home equity.
2
What is one advantage of a reverse mortgage?
The homeowner receives income while still living in their home.
3
What are the main components of an insurance premium?
Risk cost, inflation, and profit margin.
4
In a permanent life insurance policy, what is the cash value?
A savings element that grows over time and can be accessed by the policyholder.
5
How does risk transfer work in managing pure risks?
The risk is transferred to another party, usually through insurance.
6
What is risk retention in the context of coping with pure risks?
Accepting and planning to cover the losses from a risk internally.
7
Which of the following is an example of loss prevention, a way to reduce pure risks?
Installing fire alarms and sprinkler systems in a building.
8
Which of the following is an example of speculative risk?
Stock market investment.
9
Which of the following is a characteristic of pure risk?
It is often uncontrollable and has only the potential for loss or no loss.
10
What is the primary goal of the buy-and-hold strategy?
To benefit from long-term market growth
11
What is a key advantage of the buy-and-hold strategy?
It reduces the impact of market timing mistakes
12
Which factor is most important in determining an individual’s life cycle investment strategy?
The individual’s age, risk tolerance, and financial objectives
13
What is a common recommendation for young investors in life cycle investing?
Allocate more heavily to growth-oriented, high-risk assets
14
How does life cycle investing typically adjust as an individual approaches retirement?
Shifts towards more conservative investments to preserve capital
15
Which type of financial product is commonly used in the later stages of life cycle investing to provide income?
Bonds and annuities
16
Which type of investment vehicle is most suitable for achieving short-term financial goals (e.g., within 1-3 years)?
Money market funds
17
Why are long-term investments, such as stocks, often recommended for financial goals 10+ years away?
They provide a higher potential for compounding returns over time
18
What is a key consideration when choosing an investment vehicle for a financial goal based on its timeline?
The alignment between risk tolerance, return expectations, and time horizon
19
Why might bonds be preferred over stocks for short-to-medium-term financial goals?
Bonds typically offer greater stability and lower risk compared to stocks
20
Which of the following investments is typically recommended to hedge against inflation?
Stocks of companies with strong pricing power
21
Which asset class is often used to protect wealth during inflation because of its tangible value?
Real estate
22
What does yield to maturity (YTM) represent for a coupon bond?
The total return the investor will earn if the bond is held until maturity
23
a bond’s YTM is higher than its coupon rate, what does this indicate?
The bond is trading at a discount.
24
What does the Sharpe Ratio measure in the context of investing?
The risk-adjusted return of an investment
25
If a portfolio’s return increases but its standard deviation remains the same, what happens to its Sharpe Ratio?
It increases