Question

a term life policy is the least expensive way to
○ insure your health, ability to work and your life all in one policy.
○ save for your retirement years as the policy builds cash value.
○ insure your life and provide for your responsibilities in the event of unexpected death.
○ build a big estate when you die.
question 5 2.27 pts
which of the following investments achieves the greatest diversification?
○ bonds
○ mutual funds
○ stocks
○ savings accounts

Explanation:

First Question (Term Life Policy)

• Term life insurance provides coverage for a specific term (e.g., 10, 20 years) and is designed to insure life and cover financial responsibilities (like debts, dependents' needs) if the insured dies during the term. It’s affordable (least expensive) for pure life insurance.
• The first option is incorrect as term life doesn’t combine health/work insurance. The second is wrong because term life has no cash value (unlike whole life). The fourth is incorrect as it doesn’t build an estate (it’s for covering obligations, not wealth accumulation for heirs’ estates).

• Mutual funds pool money from many investors to invest in a diversified portfolio of stocks, bonds, or other securities. Bonds (single asset class), stocks (single asset class), and savings accounts (low - risk, not diversified across assets) have less diversification than mutual funds, which spread investments across multiple assets.

Answer:

C. insure your life and provide for your responsibilities in the event of unexpected death. (Note: Assuming the options are labeled A, B, C, D with the third option as C; adjust label if original has different numbering.)

Second Question (Investment Diversification)