At a minimum, which of the following would you need to know to estimate the amount of additional reward you will receive for purchasing a risky asset instead of a risk-free asset?
I. asset's standard deviation
II. asset's beta
III. risk-free rate of return
IV. market risk premium
A. I and III only
B. II and IV only
C. III and IV only
D. I, III, and IV only
E. I, II, III, and IV
Ans: B. II and IV only
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The risk management function should be performed in isolation. There is no need for interaction between the risk management department and other departments.
a. true b. false
Which of these is likely to occur when life or health insurance is being applied for?
A) The Medical Information Bureau (MIB) will determine the risk classification B) The agent is required to report all medical information to the Medical Information Bureau (MIB) C) Physical examinations are required D) Medical history from the insured may be reviewed and reported