Question 1

Adverse selection is a situation where customers who most need insurance are more likely to apply for insurance.

Accepted Answer

A) True 
 B)False  True

Question 2

The primary function of insurance companies is to:

Accepted Answer

A) generate fees for the banks that sell insurance products 
B) sell a variety of consumer investment products 
C) protect policyholders from adverse events 
D) assist in the transfer of wealth into the future 
A) generate fees for the banks that sell insurance products 
B) sell a variety of consumer investment products 
C) protect policyholders from adverse events 
D) assist in the transfer of wealth into the future C

Question 3

Which of the following statements is true?

Accepted Answer

A) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders make periodic premium payments. 
B) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders make a lump sum payment at maturity of the policy. 
C) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders receive periodic premium payments. 
D) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders receive a lump sum payment at maturity of the policy. 
A) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders make periodic premium payments. 
B) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders make a lump sum payment at maturity of the policy. 
C) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders receive periodic premium payments. 
D) Ordinary life insurance involves policies marketed on an individual basis, on which policyholders receive a lump sum payment at maturity of the policy. A

Question 4

Which of the following statements is true?

Accepted Answer

A) Australian governments have encouraged national savings through superannuation. 
B) The government has provided taxation incentives aimed at increasing voluntary contributions to superannuation by both employers and employees. 
C) The government has introduced legislative requirements forcing employers to contribute to superannuation on behalf of their employees. 
D) All of the listed options are correct. 
A) Australian governments have encouraged national savings through superannuation. 
B) The government has provided taxation incentives aimed at increasing voluntary contributions to superannuation by both employers and employees. 
C) The government has introduced legislative requirements forcing employers to contribute to superannuation on behalf of their employees. 
D) All of the listed options are correct.

Question 5

Which of the following statements is true in the context of SOARS?

Accepted Answer

A) Oversight entities are subject to routine information gathering from statistical returns and onsite visits. 
B) Mandated improvement entities are not at material risk of failure. 
C) Normal entities lie outside APRA's tolerable risk range, but are unlikely to fail. 
D) Restructure entities have lost APRA's confidence. 
A) Oversight entities are subject to routine information gathering from statistical returns and onsite visits. 
B) Mandated improvement entities are not at material risk of failure. 
C) Normal entities lie outside APRA's tolerable risk range, but are unlikely to fail. 
D) Restructure entities have lost APRA's confidence.

Question 6

SOARS stands for Supervisory Oversight and Regulations System.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following are key features of the regulatory and supervisory environment of the insurance industry?

Accepted Answer

A) Life insurance companies are now freed of capital adequacy regulations. 
B) Life insurance companies have additional reporting requirements. 
C) Overall, life insurance companies are less regulated than before to enhance innovation in the industry. 
D) All of the listed options are correct. 
A) Life insurance companies are now freed of capital adequacy regulations. 
B) Life insurance companies have additional reporting requirements. 
C) Overall, life insurance companies are less regulated than before to enhance innovation in the industry. 
D) All of the listed options are correct.

Question 8

While insurance companies are exposed to credit, operational and investment risk, there is no direct regulation for these risks set out by APRA.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is true?

Accepted Answer

A) Net asset value refers to the book value of assets in a managed fund portfolio divided by the number of shares outstanding. 
B) Net asset value refers to the book value of assets in a managed fund portfolio multiplied by the number of shares outstanding. 
C) Net asset value refers to the market value of assets in a managed fund portfolio multiplied by the number of shares outstanding. 
D) None of the listed options are correct. 
A) Net asset value refers to the book value of assets in a managed fund portfolio divided by the number of shares outstanding. 
B) Net asset value refers to the book value of assets in a managed fund portfolio multiplied by the number of shares outstanding. 
C) Net asset value refers to the market value of assets in a managed fund portfolio multiplied by the number of shares outstanding. 
D) None of the listed options are correct.

Question 10

Insurance policy benefits are classified on an insurance company's balance sheet as:

Accepted Answer

A) liabilities, because the insurance company may have to pay out the benefits 
B) assets, because policy benefits are valuable to the company 
C) liabilities, because customers may fall behind on their premium payments 
D) assets, because policy benefits are fully covered by premium payments 
A) liabilities, because the insurance company may have to pay out the benefits 
B) assets, because policy benefits are valuable to the company 
C) liabilities, because customers may fall behind on their premium payments 
D) assets, because policy benefits are fully covered by premium payments

Question 11

Which of the following statements is true in relation to the balance sheet and balance sheet trends of general insurance companies?

Accepted Answer

A) They tend to have a high proportion of investments in equity assets. 
B) They tend to have a low proportion of investments in bonds. 
C) There has been little change in the structure of assets between 2002 and 2013, except for a decline in equity investments. 
D) All of the listed options are correct. 
A) They tend to have a high proportion of investments in equity assets. 
B) They tend to have a low proportion of investments in bonds. 
C) There has been little change in the structure of assets between 2002 and 2013, except for a decline in equity investments. 
D) All of the listed options are correct.

Question 12

An individual's life insurance policy usually covers the policyholder plus the policyholder's spouse and family.

Accepted Answer

A) True 
 B)False

Question 13

Pure insurance companies are exposed to a single risk only, this being insurance risk.

Accepted Answer

A) True 
 B)False

Question 14

What were the major incentives provided by the government to increase savings contributions to superannuation funds? Why is the superannuation industry an important and vibrant part of the Australian financial sector?

Accepted Answer

Over the past 20 years, Australian gover

Question 15

Which of the following statements is true?

Accepted Answer

A) A term insurance policy has no savings element attached to it. 
B) The maximum term of a term life insurance is 20 years. 
C) The minimum term of a term life insurance is five years. 
D) A term insurance policy has no savings element attached to it and the maximum term of a term life insurance is 20 years. 
A) A term insurance policy has no savings element attached to it. 
B) The maximum term of a term life insurance is 20 years. 
C) The minimum term of a term life insurance is five years. 
D) A term insurance policy has no savings element attached to it and the maximum term of a term life insurance is 20 years.

Question 16

Which of the following statements is true with regard to the regulation of managed funds?

Accepted Answer

A) Managed funds are unregulated. 
B) APRA is the primary regulator for managed funds. 
C) ASIC is the primary regulator for managed funds. 
D) The ACCC is the primary regulator for managed funds. 
A) Managed funds are unregulated. 
B) APRA is the primary regulator for managed funds. 
C) ASIC is the primary regulator for managed funds. 
D) The ACCC is the primary regulator for managed funds.

Question 17

Which of the following statements is true?

Accepted Answer

A) Unbundled life insurance is also called investment-free insurance. 
B) Bundled life insurance is also called investment-free insurance. 
C) Unbundled life insurance is also called investment-linked insurance. 
D) Bundled life insurance is also called investment-linked insurance. 
A) Unbundled life insurance is also called investment-free insurance. 
B) Bundled life insurance is also called investment-free insurance. 
C) Unbundled life insurance is also called investment-linked insurance. 
D) Bundled life insurance is also called investment-linked insurance.

Question 18

Discuss the development of the general insurance industry over the period 1980 to 2014 and briefly explain the major risks of underwriting general insurance.

Accepted Answer

In December 2013, there were a total of

Question 19

Through ... , general insurers are able to transfer all or part of the insured risk to a new contract with another insurance company.

Accepted Answer

A) insurance 
B) reinsurance 
C) underwriting 
D) private placement 
A) insurance 
B) reinsurance 
C) underwriting 
D) private placement

Question 20

Which of the following statements is true?

Accepted Answer

A) The cash surrender value of a policy is normally only a portion of the contract's face value. 
B) The cash surrender value of a policy is normally equal to the contract's face value. 
C) The cash surrender value of a policy is normally more than the contract's face value. 
D) A generalisation of the cash surrender value of a policy in relation to its face value is not possible. 
A) The cash surrender value of a policy is normally only a portion of the contract's face value. 
B) The cash surrender value of a policy is normally equal to the contract's face value. 
C) The cash surrender value of a policy is normally more than the contract's face value. 
D) A generalisation of the cash surrender value of a policy in relation to its face value is not possible.

Adverse selection is a situation where customers who most need insurance are more likely to apply for insurance.

The primary function of insurance companies is to:

Which of the following statements is true?

Which of the following statements is true?

Which of the following statements is true in the context of SOARS?

SOARS stands for Supervisory Oversight and Regulations System.

Which of the following are key features of the regulatory and supervisory environment of the insurance industry?

While insurance companies are exposed to credit, operational and investment risk, there is no direct regulation for these risks set out by APRA.

Which of the following statements is true?

Insurance policy benefits are classified on an insurance company's balance sheet as:

Which of the following statements is true in relation to the balance sheet and balance sheet trends of general insurance companies?

An individual's life insurance policy usually covers the policyholder plus the policyholder's spouse and family.

Pure insurance companies are exposed to a single risk only, this being insurance risk.

What were the major incentives provided by the government to increase savings contributions to superannuation funds? Why is the superannuation industry an important and vibrant part of the Australian financial sector?

Which of the following statements is true?

Which of the following statements is true with regard to the regulation of managed funds?

Which of the following statements is true?

Discuss the development of the general insurance industry over the period 1980 to 2014 and briefly explain the major risks of underwriting general insurance.

Through ... , general insurers are able to transfer all or part of the insured risk to a new contract with another insurance company.

Which of the following statements is true?

Why Are Financial Institutions Special

The Financial Service Industry: Depository Institutions

Risks of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: the Duration Model

Managing Interest Rate Risk Using Off-Balance-Sheet Instruments

Managing Interest Rate Risk Using Securitisation

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Technology and Other Operational Risks

Capital Management and Adequacy

Filters

Exam 3: The Financial Service Industry: Other Financial Institutions

Adverse selection is a situation where customers who most need insurance are more likely to apply for insurance.

The primary function of insurance companies is to:

Which of the following statements is true?

Which of the following statements is true?

Which of the following statements is true in the context of SOARS?

SOARS stands for Supervisory Oversight and Regulations System.

Which of the following are key features of the regulatory and supervisory environment of the insurance industry?

While insurance companies are exposed to credit, operational and investment risk, there is no direct regulation for these risks set out by APRA.

Which of the following statements is true?

Insurance policy benefits are classified on an insurance company's balance sheet as:

Which of the following statements is true in relation to the balance sheet and balance sheet trends of general insurance companies?

An individual's life insurance policy usually covers the policyholder plus the policyholder's spouse and family.

Pure insurance companies are exposed to a single risk only, this being insurance risk.

What were the major incentives provided by the government to increase savings contributions to superannuation funds? Why is the superannuation industry an important and vibrant part of the Australian financial sector?

Which of the following statements is true?

Which of the following statements is true with regard to the regulation of managed funds?

Which of the following statements is true?

Discuss the development of the general insurance industry over the period 1980 to 2014 and briefly explain the major risks of underwriting general insurance.

Through ... , general insurers are able to transfer all or part of the insured risk to a new contract with another insurance company.

Which of the following statements is true?

Why Are Financial Institutions Special

The Financial Service Industry: Depository Institutions

Risks of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: the Duration Model

Managing Interest Rate Risk Using Off-Balance-Sheet Instruments

Managing Interest Rate Risk Using Securitisation

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Technology and Other Operational Risks

Capital Management and Adequacy

Filters