Math Unit Eleven
Card Set Information
Math Unit Eleven
Terms for test 11
What is the primary purpose of life insurance?
To provide financial comensation to dependents following a death.
An optional, added policy feature that may or may not increase the cost of the insurance policy:
Three major types of life insurance policies:
Term, lifetime, and endowment
The least expensive insurance and provides temporary protection for a specified number of years:
Term Life Insurance
Person named to receive the death beneift of the policy:
Amount of insurance coverage purchased:
This allows the policyholder to renew the term insurance at a higher rate:
Two types of lifetime policies:
Straight life and limited-payment life
This life insurance is usually paid for throughout the life of the policyholder:
This life insurance has payments for a limited number of years:
Is the annual cost for limited-payment life higher or lower than it is for straight life?
What is the most expensive type of life insurance?
What do the rates for a lifetime policy depend upon?
1. Type of policy purchased
2. Age at time of purpose
3. Male or Female
4. Number of units purchased
A face value of $1,000:
The more frequent the payment, the higher or the lower premium due?
Benefits besides the death benefit which are paid to the beneficiary build up a what?
The beneficiary may also borrow against the cash value and...
...continue their insurance protection
The beneficiary cancels the insurance policy and uses its value to convert to term insurance with the same face value but for a limited time of coverage:
This allows the policyholder, who is terminally ill, to receive all or part of the death proceeds before death:
Accelerated Death Benefit
A percentage of the company's proft:
The beneficiary collects the full face value in one payment:
Lump Sum Payment
A specified amount of money which is paid in equal payments at regular intervals:
Four ways a beneficiary may receive an insurance annuity:
Fixed amount, fixed number of years, lifetime, and a life annuity which is guaranteed
This allows a beneficiary to receive their annuity in specific monthly payments until the money runs out:
This allows a beneficiary to receive their annuity for a specific time length (10 years):
Fixed number of years
This allows a beneficiary to receive their annuity in gradual payments for their entire life:
This allows a beneficiary to receive their annuity in monthly payments for a certain number of years:
Life annuity which is guaranteed
A certificate issued by a government or corporation promising to pay the face value at maturity plus interest at certain intervals:
One who owns a bond:
As a bondholder, the person is not an owner, but is a...
Bonds sold at face value:
Bonds sold greater than the face value:
Bonds sold less than the face value:
Cost of a bond:
An individual licensed to make stock and bond sales:
Many investors consider what as a good source of stock and bond information?
Wall Street Journal
How is the net change found?
By subtracting the previous day's closing price from the present day's closing price
A savings account usuallys pays a higher or lower interest rate than bonds?
Which are less risky, bonds or stocks?
The return on an investment:
Formula for Annual Yield:
Annual Yield = selling price of bond
The amount a seller receives from the sale of bonds:
Earned interest that is not payable until the end of the current interest period:
When finding the accrued interest period, what is counted?
The first day but not the last
Cash or assets that can be easily converted into cash:
Two types of stock:
Common and preferred
Which stockholder votes for the company's board of directors and administrative officers?
Which stockholders receive dividends?
The price for which the stock is initially sold:
Stock with no printed value:
The current selling price quoted in dollars per share:
The dividend as a percent of the closing price:
Formula for Yld%
annual dividend per share
Yld% = closing price per share
An abbreviation for price to earnings ratio and is a ratio of the closing market price to the corporation's annual earnings per share:
Formula for P-E Ratio:
closing market price
P-E Ratio = corporation's annual earnings per share
An abbreviation for net change and refers to the difference between this day's closing price and the previous day's closing price:
Formula for Net Chg:
Net Chg = closing price today - closing price yesterday
Stocks sold in multiples of 100 shares are called...
Stocks sold less than 100 shares a time:
Stocks bought directly from the company:
Profits distributed by the corporation:
Shareholders receive additional shares at no cost to them:
Rising stock market prices:
Selling stocks in anticipation of falling prices:
Profit made on the sale of stock:
A loss on the sale of stock:
Formula for capital gain:
Capital Gain = net proceeds - cost of stock
Formula for capital loss:
Capital Loss = cost of stock - net proceeds
The selling price of the stock minus the brokerage fee charged to the stockholder for selling the stock: