Q1. Earnings risk, a type if risk associated with human capital, is best defined as the risk of: A) sudden, unexpected loss of human capital caused by premature death. B) an inability of financial assets to meet retirement living expenses, because you live longer than expected or financial capital has experienced an unexpected, severe drop in value. C) becoming unemployed, disabled, or otherwise unable to work.
Q2. Which of the following is NOT a typical remedy for earnings risk? A) Increasing the savings rate. B) Minimizing the correlation of human and financial capital. C) A lifetime-payout annuity.
Q3. Which of the following is NOT a possible remedy for earnings risk? A) Maximize the correlation of human and financial capital. B) Increase the savings rate. C) Investment in unrelated, diversifying financial assets.
Q4. Life insurance is most commonly used to hedge against: A) earnings risk. B) longevity risk. C) mortality risk.
Q5. Which of the following statements regarding an annuity is least accurate? A) A difference between an annuity and a 401k or 403b account is there is no limitation on the maximum amount that can be placed into an annuity. B) If the investor lives too long it is possible for the annuity to run out of money resulting in the payments from the annuity stopping. C) In an immediate annuity the purchaser of the annuity invests a lump sum of money with the payments from the annuity starting immediately.
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发表于 2009-1-20 10:06
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