The expected return on a life insurance policy. The Expected return: The expected return on an investment refers to the weighted average of estimated returns and estimation of occurrence of those returns. Life Insurance Policy: Life insurance policy is an agreement between two parties, the two parties are the insurance company and the policy buyer. The insurance company depicts to pay a predetermined amount to the policy holder in case of specified future events.

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Answer 1

Question

Chapter 8, Problem 3Q

a)

Summary Introduction

To explain: The expected return on a life insurance policy.

The Expected return:

The expected return on an investment refers to the weighted average of estimated returns and estimation of occurrence of those returns.

Life Insurance Policy:

Life insurance policy is an agreement between two parties, the two parties are the insurance company and the policy buyer. The insurance company depicts to pay a predetermined amount to the policy holder in case of specified future events.

b.

Summary Introduction

To explain: The correlation coefficient between the return on the insurance policy and the return on the human capital.

Correlation Coefficient:

A correlation coefficient is a tool of statistical measure. This tool measures the relation between the two variables. It measures how the change in one value of variable affects the other.

c.

Summary Introduction

To explain: The reason for buying the life insurance in spite of low expected returns.

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Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 71.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 71.0 when he fully retires, he will begin to make annual withdrawals of $177,333.00 from his retirement account until he turns 94.00. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 9.00% interest rate. Submit Answer format: Currency: Round to: 2 decimal places.

Answer 2

Question

Chapter 8, Problem 3Q

a)

Summary Introduction

To explain: The expected return on a life insurance policy.

The Expected return:

The expected return on an investment refers to the weighted average of estimated returns and estimation of occurrence of those returns.

Life Insurance Policy:

Life insurance policy is an agreement between two parties, the two parties are the insurance company and the policy buyer. The insurance company depicts to pay a predetermined amount to the policy holder in case of specified future events.

b.

Summary Introduction

To explain: The correlation coefficient between the return on the insurance policy and the return on the human capital.

Correlation Coefficient:

A correlation coefficient is a tool of statistical measure. This tool measures the relation between the two variables. It measures how the change in one value of variable affects the other.

c.

Summary Introduction

To explain: The reason for buying the life insurance in spite of low expected returns.

Expert Solution & Answer

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Answer 3

Question

Chapter 8, Problem 3Q

a)

Summary Introduction

To explain: The expected return on a life insurance policy.

The Expected return:

The expected return on an investment refers to the weighted average of estimated returns and estimation of occurrence of those returns.

Life Insurance Policy:

Life insurance policy is an agreement between two parties, the two parties are the insurance company and the policy buyer. The insurance company depicts to pay a predetermined amount to the policy holder in case of specified future events.

b.

Summary Introduction

To explain: The correlation coefficient between the return on the insurance policy and the return on the human capital.

Correlation Coefficient:

A correlation coefficient is a tool of statistical measure. This tool measures the relation between the two variables. It measures how the change in one value of variable affects the other.

c.

Summary Introduction

To explain: The reason for buying the life insurance in spite of low expected returns.

Expert Solution & Answer

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Answer 4

Question

Chapter 8, Problem 3Q

a)

Summary Introduction

To explain: The expected return on a life insurance policy.

The Expected return:

The expected return on an investment refers to the weighted average of estimated returns and estimation of occurrence of those returns.

Life Insurance Policy:

Life insurance policy is an agreement between two parties, the two parties are the insurance company and the policy buyer. The insurance company depicts to pay a predetermined amount to the policy holder in case of specified future events.

b.

Summary Introduction

To explain: The correlation coefficient between the return on the insurance policy and the return on the human capital.

Correlation Coefficient:

A correlation coefficient is a tool of statistical measure. This tool measures the relation between the two variables. It measures how the change in one value of variable affects the other.

c.

Summary Introduction

To explain: The reason for buying the life insurance in spite of low expected returns.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 3Q

a)

Summary Introduction

To explain: The expected return on a life insurance policy.

The Expected return:

The expected return on an investment refers to the weighted average of estimated returns and estimation of occurrence of those returns.

Life Insurance Policy:

Life insurance policy is an agreement between two parties, the two parties are the insurance company and the policy buyer. The insurance company depicts to pay a predetermined amount to the policy holder in case of specified future events.

b.

Summary Introduction

To explain: The correlation coefficient between the return on the insurance policy and the return on the human capital.

Correlation Coefficient:

A correlation coefficient is a tool of statistical measure. This tool measures the relation between the two variables. It measures how the change in one value of variable affects the other.

c.

Summary Introduction

To explain: The reason for buying the life insurance in spite of low expected returns.

Answer 6

Chapter 8, Problem 3Q

a)

Summary Introduction

To explain: The expected return on a life insurance policy.

The Expected return:

The expected return on an investment refers to the weighted average of estimated returns and estimation of occurrence of those returns.

Life Insurance Policy:

Life insurance policy is an agreement between two parties, the two parties are the insurance company and the policy buyer. The insurance company depicts to pay a predetermined amount to the policy holder in case of specified future events.

Answer 7

Chapter 8, Problem 3Q

a)

Summary Introduction

To explain: The expected return on a life insurance policy.

The Expected return:

The expected return on an investment refers to the weighted average of estimated returns and estimation of occurrence of those returns.

Life Insurance Policy:

Life insurance policy is an agreement between two parties, the two parties are the insurance company and the policy buyer. The insurance company depicts to pay a predetermined amount to the policy holder in case of specified future events.

Answer 8

b.

Summary Introduction

To explain: The correlation coefficient between the return on the insurance policy and the return on the human capital.

Correlation Coefficient:

A correlation coefficient is a tool of statistical measure. This tool measures the relation between the two variables. It measures how the change in one value of variable affects the other.

Answer 9

b.

Summary Introduction

To explain: The correlation coefficient between the return on the insurance policy and the return on the human capital.

Correlation Coefficient:

A correlation coefficient is a tool of statistical measure. This tool measures the relation between the two variables. It measures how the change in one value of variable affects the other.

Answer 10

c.

Summary Introduction

To explain: The reason for buying the life insurance in spite of low expected returns.

Answer 11

c.

Summary Introduction

To explain: The reason for buying the life insurance in spite of low expected returns.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 8 - Suppose you owned a portfolio consisting of...Ch. 8 - Prob. 2Q Ch. 8 - Prob. 3Q Ch. 8 - Is it possible to construct a portfolio of...Ch. 8 - Stock A has an expected return of 7%, a standard...Ch. 8 - A stock had a 12% return last year, a year when...Ch. 8 - If investors aversion to risk increased, would the...Ch. 8 - Prob. 8Q Ch. 8 - In Chapter 7, we saw that if the market interest...Ch. 8 - Prob. 1P

To explain: The reason for buying the life insurance in spite of low expected returns.

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Chapter 8 Solutions