金融市场与机构(第六版)测试银行ch224642.pdf

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1、1 Financial Markets and Institutions,6e(Mishkin/Eakins)Chapter 22 Insurance Companies and Pension Funds 22.1 Multiple Choice 1)The earliest form of insurance was _ insurance.A)life B)health C)automobile D)property and casualty Answer:D Question Status:Previous Edition 2)The certainty equivalent for

2、risk-averse people who buy insurance is the A)maximum loss they may sustain.B)expected loss they may sustain.C)insurance premium they pay.D)profit the insurance company earns.Answer:C Question Status:Previous Edition 3)The problem of _ occurs when those most likely to get large insurance payoffs are

3、 the ones who want to purchase insurance the most.A)asymmetric information B)moral hazard C)adverse selection D)fraudulent behavior Answer:C Question Status:Previous Edition 4)When those most likely to produce the outcome insured against are the ones who purchase insurance,insurance companies are sa

4、id to face the problem of A)fraudulent claims.B)moral hazard.C)adverse selection.D)pecuniary purchases.Answer:C Question Status:Previous Edition 5)To prevent adverse selection,health and life insurance companies may do all the following except A)charge higher premiums to people with certain pre-exis

5、ting health conditions.B)require potential policyholders to submit medical records.C)refuse to sell policies to people with certain pre-existing health conditions.D)charge the same premiums to all policyholders.Answer:D Question Status:Previous Edition 2 6)In the case of an insurance policy,_ occurs

6、 when the existence of insurance encourages the insured party to take risks that increase the likelihood of an insurance payoff.A)moral hazard B)opportunism C)adverse selection D)shirking Answer:A Question Status:Previous Edition 7)Some automobile owners will drive faster knowing that they are cover

7、ed by health and automobile insurance.This behavior creates the problem of A)fraudulent claims.B)moral hazard.C)adverse selection.D)pecuniary purchases.Answer:B Question Status:Previous Edition 8)In the case of an insurance policy,_ occurs when the existence of insurance encourages the insured party

8、 to take risks that increase the likelihood of an insurance payoff;_ occurs when those most likely to get large insurance payoffs are the ones who want to purchase insurance the most.A)moral hazard;insurance market discrimination B)moral hazard;insurance segregation C)moral hazard;adverse selection

9、D)adverse selection;moral hazard Answer:C Question Status:Previous Edition 9)To prevent the moral hazard problem,health and life insurance companies may write policies A)for which premiums increase dramatically once the policyholder is discovered to have contracted an illness.B)containing provisions

10、 which either reduce or eliminate benefits to persons who contract pre-specified illnesses.C)limiting the amount the companies will pay in the event that claims are submitted by policyholders.D)with all of the above provisions.E)with only A and B of the above provisions.Answer:D Question Status:Prev

11、ious Edition 3 10)To prevent the moral hazard problem,health and life insurance companies may write policies A)that increase benefits dramatically once the policyholder is discovered to have contracted an illness so that the patient can recover sooner.B)containing provisions which either reduce or e

12、liminate benefits to persons who contract pre-specified illnesses.C)boosting the amount the companies will pay health providers in the event that claims are submitted by policyholders.D)with only A and B of the above provisions.Answer:B Question Status:Previous Edition 11)Insurance management tools

13、that give policyholders incentives to avoid accidents insured against include A)deductibles.B)risk-based premiums.C)coinsurance.D)all of the above.Answer:D Question Status:Previous Edition 12)Which is not a management practice for reducing the problems of adverse selection and moral hazard in insura

14、nce?A)deductibles B)restrictive provisions C)coinsurance D)reinsurance Answer:D Question Status:Previous Edition 13)Insurance companies employ underwriters A)as an alternative to higher deductibles.B)to control the risky behavior of their policy holders.C)to control the risk incurred on their behalf

15、 by agents.D)to encourage the loyalty of exclusive agents.E)to maintain the independence of independent agents.Answer:C Question Status:Previous Edition 14)_ companies get a tax advantage;most new insurance companies organize as _ companies.A)Mutual insurance;mutual insurance B)Mutual insurance;stoc

16、k C)Stock;stock D)Stock;mutual insurance Answer:B Question Status:Previous Edition 4 15)(I)A majority of life insurance companies are organized as mutual companies.(II)State governments have the major responsibility for regulating insurance companies.A)(I)is true,(II)false.B)(I)is false,(II)true.C)B

17、oth are true.D)Both are false.Answer:B Question Status:Previous Edition 16)Which of the following do not help people during their retirement?A)Term life insurance B)Annuity C)Whole life insurance D)Universal life insurance Answer:A Question Status:Previous Edition 17)A term life insurance policy pro

18、vides A)insurance benefits only.B)savings benefits only.C)both insurance and savings benefits.D)none of the above.Answer:A Question Status:Previous Edition 18)Which of the following types of life insurance provides no savings element?A)Term B)Whole C)Universal D)None of the above has a savings eleme

19、nt.Answer:A Question Status:Previous Edition 19)Which of the following is true of life insurance companies?A)They primarily hold long-term assets that are not particularly liquid.B)They primarily hold short-term liquid assets.C)Payouts to policyholders are relatively predictable.D)Both A and C of th

20、e above.Answer:D Question Status:Previous Edition 20)Of the following financial intermediaries,which holds the least liquid assets?A)Property and casualty insurance companies B)Life insurance companies C)Money market mutual funds D)Commercial banks Answer:B Question Status:Previous Edition 5 21)Rela

21、tive to life insurance companies,property and casualty insurance companies hold A)more liquid assets.B)more long-term government bonds.C)more commercial mortgages.D)fewer municipal bonds.Answer:A Question Status:Previous Edition 22)The largest share of life insurance companies assets are A)corporate

22、 stock.B)corporate bonds.C)government securities.D)cash reserves.Answer:B Question Status:Previous Edition 23)The federal regulatory agency responsible for regulating the activities of life insurance companies is A)the Federal Deposit Insurance Corporation.B)the Federal Reserve.C)the Federal Life In

23、surance Board.D)none of the above;there is no such federal regulatory agency.Answer:D Question Status:Previous Edition 24)Which of the following is not a feature of the Terrorism Risk Insurance Act of 2002?A)Losses that exceed$100 billion are not covered.B)The law does not apply to acts of internati

24、onal terrorism when losses are less than$5 million.C)Government pays 50 percent of losses in excess of$100 billion.D)Government pays 90 percent of the losses.Answer:C Question Status:Previous Edition 25)Insurance companies attempts to minimize adverse selection and moral hazard explain which of the

25、following insurance practices?A)Risk-assessment screening B)Risk-based premiums C)Restrictive provisions D)All of the above E)Only A and B of the above Answer:D Question Status:Previous Edition 6 26)Insurance companies attempts to minimize adverse selection and moral hazard explain which of the foll

26、owing insurance practices?A)Requiring collateral for policies B)Risk-based premiums C)Compensating balances D)All of the above E)Only A and B of the above Answer:B Question Status:Previous Edition 27)Insurance companies attempts to minimize adverse selection and moral hazard explain which of the fol

27、lowing insurance practices?A)Gender-neutral premiums B)Flat-rate premiums C)Restrictive provisions D)All of the above E)Only A and B of the above Answer:C Question Status:Previous Edition 28)Insurance companies attempts to minimize adverse selection and moral hazard explain which of the following in

28、surance practices?A)Collection of information and screening of potential policyholders B)Risk-based premiums C)Cancellation of insurance D)All of the above Answer:D Question Status:Previous Edition 29)Insurance companies attempts to minimize adverse selection and moral hazard explain which of the fo

29、llowing insurance practices?A)Collection of information and screening of potential policyholders B)Risk-based premiums C)Deductibles and coinsurance D)All of the above E)Only A and B of the above Answer:D Question Status:Previous Edition 30)If automobile insurance companies were prevented from charg

30、ing risk-based premiums,but could selectively screen potential policyholders,the likely effect would be to A)increase the number of young men obtaining insurance coverage relative to young women.B)decrease the number of young women obtaining insurance coverage relative to young men.C)decrease the nu

31、mber of young men obtaining insurance coverage relative to young women.D)both A and B of the above.Answer:C Question Status:Previous Edition 7 31)The fact that insurance companies charge young males higher automobile insurance premiums than young females is an example of A)risk-based premiums.B)an a

32、ttempt to minimize adverse selection.C)coinsurance.D)all of the above.E)only A and B of the above.Answer:E Question Status:Previous Edition 32)Insurance management tools that give policyholders incentives to avoid accidents insured against include A)deductibles.B)risk-based premiums.C)coinsurance.D)

33、all of the above.Answer:D Question Status:Previous Edition 33)Clauses in life insurance policies that eliminate death benefits if the insured person commits suicide are an example of a A)restrictive provision.B)restrictive covenant.C)anti-fraud exclusion.D)risk-based deductible.Answer:A Question Sta

34、tus:Previous Edition 34)The fastest growing financial intermediary is A)commercial banks.B)pension plans.C)life insurance companies.D)mutual funds.Answer:B Question Status:Previous Edition 35)Which of the following has not contributed to the growth of pension plans?A)Privatization of Social Security

35、 B)Urbanization C)Retirement at earlier ages D)Increases in life expectancy Answer:A Question Status:Previous Edition 8 36)A companys pension plan promises employees a specific amount of income when they retire.However,the plan does not have the assets to meet these future obligations to employees.T

36、his plan represents a defined-_ plan that is _.A)benefit;underfunded B)benefit;overfunded C)contribution;underfunded D)contribution;overfunded Answer:A Question Status:Previous Edition 37)Social Security is a A)fully funded pension plan.B)federally insured private pension plan.C)government sponsored

37、 private pension plan.D)pay-as-you-go system.Answer:D Question Status:Previous Edition 38)The Social Security system is an example of a public pension plan that is A)underfunded.B)fully funded.C)overfunded.D)none of the above.Answer:A Question Status:Previous Edition 39)Which of the following statem

38、ents regarding the funding of social security is false?A)In 2004,workers contributed 6.2%of their wages up to a maximum of$87,900.B)Employers contribute an amount equal to the workers contributions.C)Interest,dividend,rent,and royalty income is also taxed to provide supplemental funds for Social Sec

39、urity.D)Contributions exceeding the amounts paid to current Social Security recipients are invested in Treasury bonds to build up a Social Security trust fund.Answer:C Question Status:Previous Edition 40)Which of the following is not a proposal for insuring that sufficient funds will be available to

40、 provide Social Security benefits to future retirees?A)Raise the maximum income cap on which workers and employers are taxed.B)Provide more generous annual cost of living increases.C)Raise the minimum age for receiving benefits.D)Reduce the amount of future benefits.Answer:B Question Status:Previous

41、 Edition 9 41)Which proposal for insuring that sufficient funds will be available to provide Social Security benefits to future retirees does the AARP find least objectionable?A)Raise the maximum income cap on which workers and employers are taxed.B)Provide more generous annual cost of living increa

42、ses.C)Privatize Social Security.D)Lower immigration restrictions to increase the number of workers paying into the Social Security system.Answer:A Question Status:Previous Edition 42)Privatization of Social Security A)would transform the program from an unfunded pay-as-you-go system to a fully funde

43、d pension plan.B)would mean that workers current contributions to Social Security would no longer be available to pay benefits to current retirees.C)receives less public support when the stock market declines.D)all of the above.E)none of the above.Answer:D Question Status:Previous Edition 43)Fraudul

44、ent practices and other abuses of private pension funds led Congress to enact the A)Federal Deposit Insurance Corporation Act.B)Employee Retirement Income Security Act.C)Federal Reserve Act.D)Social Security Act.Answer:B Question Status:Previous Edition 44)Keogh plans and IRAs are A)individual pensi

45、on plans.B)government pension plans.C)corporate pension plans.D)public pension plans.Answer:A Question Status:Previous Edition 45)Private pension plan assets are invested mainly in A)government securities.B)corporate bonds.C)stock.D)certificates of deposit.Answer:C Question Status:Previous Edition 1

46、0 46)Which of the following pensions does not promise employees a specific retirement benefit?A)defined-benefit plan B)defined-contribution plan C)overfunded plan D)underfunded plan Answer:B Question Status:Previous Edition 47)All insurance is subject to several basic principles including all of the

47、 following except A)the insured must provide full and accurate information to the insurance company.B)the insured is to profit as a result of insurance coverage.C)the loss must be quantifiable.D)there must be a relationship between the insured and the beneficiary.Answer:B Question Status:New 48)A ba

48、sic product of life insurance companies is A)disability insurance.B)annuities.C)health insurance.D)all of the above.Answer:D Question Status:New 49)_ is an insurance product that will help if you live longer than you expect.For an initial fixed sum or stream of payments,the insurance company agrees

49、to pay you a fixed amount for as long as you live.A)A life insurance proper B)Disability insurance C)An annuity D)Health insurance Answer:C Question Status:New 50)The broad categories of life insurance products including which of the following?A)Term B)Whole life C)Universal life D)All of the above

50、Answer:D Question Status:New 51)Which life insurance policy usually requires the insured to pay a level premium for the duration of the policy,and the overpayment accumulates as a cash value that can be borrowed by the insured at reasonable rates?A)Whole life B)Term C)Universal life D)None of the ab