The potential for loss resulting from changes in market interest rates are known as:
A. Interest rate risk
B. Interest rate loss
C. Change rate risk
D. Change rate loss
A mismatch in the timing of asset maturities relative to policy benefits requiring either reinvestment or disinvestment by the insurer at uncertain future interest rates is known as:
A. Reliable Mismatch Risk
B. Maturity Mismatch Risk
C. Change Mismatch Risk
D. Risk Variance
From what the most direct value-based requirements arise which are present in account value accumulation products?
A. profit margins
B. policy holding rates
C. implicit interest rates
D. withdrawal provisions
Asset/Liability Management recognizes that the financial impact of an asset or liability is mainly realized through its:
A. Revenues
B. Cash flows
C. Expenses
D. Investments
The return on an instrument over a period of time is a combination of the cash flow it generates and the change in its value.
A. True
B. False
For immediate annuities, this is the ______________, defined by the sequence of periodic annuity benefit payments the policyholder is promised.
A. maximum credited rate
B. minimum credited rate
C. implicit interest rate
D. explicit interest rate
What give the issuer the right to retire the bond at certain times, typically if prevailing market interest rates fall below the rate on the bond?
A. Call options
B. Prepayment provisions
C. Variable income statements
D. Investments modules
The magnitude of the variable annuity benefits provided by a deferred annuity depends on the size of the account value at the end of the accumulation phase.
A. True
B. False
The two major asset classes in which life insurers invest are:
A. annuities and bonds
B. mortgages and annuities
C. bonds and investments
D. bonds and mortgages
What are designed primarily to accumulate a fund for eventual liquidation via annuitization, so the savings element is predominant?
A. Variable annuities
B. Deferred annuities
C. Immediate annuities
D. None of the above
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