Question 1

Which of the following industry is sensitive to business cycle and price changes?

Options :

A : Growth industry

B : Cyclical industry

C : Defensive industry

D : Interest sensitive industry

Answer: B

Question 2

Doug must borrow $12,000 to complete his college education. Which of the following would NOT be likely to reduce the finance charge rate?

Options :

A : If his parents took out an additional mortgage on their house for the loan

B : If the loan was insured by the federal government

C : If he went to a state college rather than a private college

D : If his parents co-signed the loan

Answer: C

Question 3

Accumulating assets to enjoy in retirement is only part of the:

Options :

A : Long-term financial planning process

B : Short-term financial planning process

C : Life time financial planning process

D : Permanent financial planning process

Answer: A

Question 4

Which projection method uses paid losses plus reserves on outstanding claims?

Options :

A : Average losses

B : Loss ratio

C : Incurred loss

D : None of the above

Answer: C

Question 5

Protective covenants are:

Options :

A : To protect employees

B : To protect the interest of the company

C : To protect shareholders

D : To protect bondholders

Answer: D

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