Insurance - Study Mode

[#121] What is the relation between investment horizon and returns?
Correct Answer

(B) Greater the investment horizon the larger the returns

Explanation

Solution: Greater the investment horizon the larger the returns is the relation between investment horizon and returns. The growth rate of the investments will depend on your risk profile, i.e., higher the risk you take in investments.

[#122] Which among the following can be categorised under transactional products?
Correct Answer

(A) Bank deposits

Explanation

Solution: Bank deposits can be categorised under transactional products. Transaction Banking division of a bank typically provides commercial banking products and services for both corporates and financial institutions, including domestic and cross-border payments, risk mitigation, international trade finance as well as trust, agency, depositary, custody and related services.

[#123] Which among the following can be categorised under contingency products?
Correct Answer

(B) Life insurance

Explanation

Solution: Life insurance can be categorised under contingency products. If there is no contingency, no payment is made. In life insurance contract, payment is certain because the death or the expiry of term will certainly occur.

[#124] Which of the below can be categorised under wealth accumulation products?
Correct Answer

(D) Shares

Explanation

Solution: Shares is a wealth accumulation product. To build a corpus for long-term goals like buying a house, building a retirement kitty or funding a child's education, investors must choose products that provide enhanced earning power. This can come in the form of diversified equity funds.

[#125] _________ is a rise in the general level of prices of goods and services in an economy over a period of time.
Correct Answer

(B) Inflation

Explanation

Solution: Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time.