Question

1. An amount of money specified in an insurance contract which the insured party has to pay toward the loss before being entitled to compensation is called a(n):
   1. Exclusion
   2. Cap
   3. Deductible
   4. Copayment
2. True/False.  The more diversified the risks in a portfolio of a given size, the less it will cost to insure the total value of the portfolio against a loss.
3. The ___more or less____ correlated the assets in your portfolio are with each other, the better your diversification will be.
4. All financial risks are ultimately borne by:
   1. Governments
   2. Corporations
   3. Households
   4. People
5. Investors who take positions that increase their exposure to certain risks solely for the purpose of increasing their wealth are called:
   1. Insurers
   2. Hedgers
   3. Speculators
   4. Arbitrageurs

Answer 1

An amount of money specified in an insurance contract which the insured party has to pay toward the loss before being entitled to compensation is called a(n):

Deductible

The more diversified the risks in a portfolio of a given size, the less it will cost to insure the total value of the portfolio against a loss.

True

The ___more or less____ correlated the assets in your portfolio are with each other, the better your diversification will be.

Less

All financial risks are ultimately borne by:

People

Investors who take positions that increase their exposure to certain risks solely for the purpose of increasing their wealth are called:

Insurers