Which of the following is a characteristic of

permanentpermanent

life insurance policies?

A.

They do not have cash values comma therefore the insured cannot borrow against them.They do not have cash values, therefore the insured cannot borrow against them.

B.

They do not have cash values, but the insured can still borrow against the policy.

C.

They have cash values and the insured can borrow against them.They have cash values and the insured can borrow against them.

D.

They have cash values, but the insured cannot borrow against them.

When a life insurance company requires prospective policyholders to take a physical examination and answer questionnaires about their health history, the insurance company is trying to

A.

Reduce adverse selection by reducing risky behavior.

B.

Reduce moral hazard by reducing risky behavior.

C.

Reduce adverse selection by screening out poor insurance risks.

D.

Reduce moral hazard by screening our poor insurance risks.

Ford Motor Credit is a type of::

A.

Business finance company

B.

Sales finance company

C.

Payday loan company

D.

Consumer finance company

A hedger takes a short position in

1010

T-bill futures contracts at the price of

9797

10 divided by 3210/32.

Each contract is for $100,000 principal. When the position is closed, the price is

9999

12 divided by 3212/32.

The hedger incurs a

gain

loss

of$nothing