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English Mock Test Chapter 7

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Question 1
Which of the below risk cannot be addressed through pensions?
A
Early death
B
Life longevity
C
Inflation
D
Investment risk
Question 2
With relation to annuities, explain what does “Liquidation period” refer to?
A
Period between the purchase of annuity and commencement of payments
B
Time taken to build up the corpus
C
Period during which insurer makes annuity payments
D
Insolvency period
Question 3
Amount of annuity payable depends on which of the following: 1. Principal sum of money 2. Investment period 3. Rate of return 4. Duration of annuity payments
A
1 and 2
B
1,2 and 3
C
1,3 and 4
D
1,2,3 and 4
Question 4
Amount of annuity payable inversely depends on which of the following: 1. Principal sum of money 2. Investment period 3. Rate of return 4. Duration of annuity payments
A
1 and 2
B
1,2 and 3
C
1,3 and 4
D
4 only
Question 5
Amount of annuity payable directly depends on which of the following: 1. Principal sum of money 2. Investment period 3. Rate of return 4. Duration of annuity payments
A
1 and 2
B
1,2 and 3
C
1,3 and 4
D
4 only
Question 6
What is the basic contingency associated with pensions?
A
Mortality
B
Morbidity
C
Post-retirement income security
D
Disability
Question 7
Who provides public pensions?
A
Employers
B
State
C
Insurers
D
NGO’s
Question 8
Who bears the investment risk in a fixed benefit annuity?
A
Insured
B
Insurer
C
State
D
Risk pool
Question 9
Which among the below statements is true? Statement I: Every pension is an annuity Statement II: Every annuity is a pension
A
I and II are true
B
I and II are false
C
I is true and II is false
D
I is false and II is true
Question 10
Which of the below best describes an ordinary annuity?
A
Equal cash flows at equal time intervals forever
B
Equal cash flows at equal time intervals for a specific time period
C
Lumpy cash flows at equal time intervals forever
D
Lumpy cash flows at equal time intervals for a specific time period
Question 11
From the choices mentioned below, select the one that cannot be categorized as an annuity.
A
Electricity Bill
B
Rs. 2000 received today, Rs. 2000 received next year and Rs. 2000 received in 2 years
C
Car payments
D
Mortgage payments
Question 12
In an ordinary annuity, payments are made or received ___________ of each period.
A
At the beginning
B
On maturity
C
At the end
D
6 months before expiry
Question 13
___________ is an annuity with an infinite life and making continuous annual payments.
A
APR
B
Amortised loan
C
Perpetuity
D
Principal
Question 14
_____________ is a term used to refer pensions that have some level of Government administration.
A
Insurance Pension Fund
B
Public Pension Fund
C
Private Pension Fund
D
Market Pension Fund
Question 15
Which of the below is a type of pension?
A
Public pensions
B
Occupational pensions
C
Personal pensions
D
All of the
Question 16
Typically, most occupational pension schemes in the past have been of the _____________________   type. This meant that the benefit payable was defined independently of the contributions made to the scheme or its investment earnings.
A
Public pensions
B
Occupational pensions
C
“Defined Benefit”
D
All of the
Question 17
_____________________:In this case, an employer can decide to manage the fund, typically setting up a trust for the purpose. The trust however can pay the pension only through purchasing an annuity from a life insurance company.
A
Uninsured pension scheme
B
Insured pension scheme
C
All of the
D
None of the above
Question 18
_____________________: In case of an insured scheme, the insurance company manages the fund. The advantage of this arrangement is that it passes on to the insurer the risks and costs of direct fund management and investment, which the employer would otherwise have had to undertake.
A
Uninsured pension scheme
B
Insured pension scheme
C
All of the above
D
None of the above
Question 19
Plans that are designed and marketed by Life Insurance and financial institutions towards providing an old age income is known as ____________________
A
Public Pension
B
Occupational Pension
C
immediate Pension
D
Personal Pension
Question 20
Which of the below risk cannot be addressed through pensions?
A
Investment risk
B
Life longevity
C
Early death
D
Inflation
Question 21
Which of the below is a type of annuity?
A
Immediate Annuity
B
Deferred Annuity
C
All of the above
D
None of the above
Question 22
Which of the below best describes an ordinary annuity?
A
Equal cash flows at equal time intervals forever
B
Lumpy cash flows at equal time intervals forever
C
Lumpy cash flows at equal time intervals for a specific time period
D
Equal cash flows at equal time intervals for a specific time period
Question 23
Mahesh has invest a lump sum amount in a pension plan and immediately starts to receive annuity on a monthly basis, which kind of Annuity has he taken?
A
Corn mutation
B
Deferred Annuity
C
Immediate Annuity
D
Payments
Question 24
_______________ is a term used to refer pensions that have some level of Government administration
A
Public Pension Fund
B
Insurance Pension Fund
C
Private Pension Fund
D
Market Pension Fund
Question 25
Which among the below statements is true? Statement I: Every pension is an annuity Statement II: Every annuity is a pension
A
I is true and II is false
B
I and II are false
C
I and II are true
D
I is false and II is true
Question 26
Public Pension Schemes are publically managed and are typically funded on a _______ basis
A
Pay as you go
B
Pay as you do
C
Pay as you Want
D
All of the above
Question 27
Mr. Rohit has already opted for Deferred Annuity however he wants to know how much amount can he withdraw as lumpsum before the start of annuity phase
A
Accumulated Value
B
1/3 rd of Fund Value
C
Fund Value
D
He can withdraw the entire amount if needed
Question 28
Rahul want a pension plan in which after he dies the annuity is paid to his spouse for her life time. Which type of Annuity Rahul should purchase?
A
Immediate Annuity
B
deferred Annuity
C
Joint Life last survivor with return of premium
D
Joint Life Annuity
Question 29
Mr. Rajesh is nearing retirement, he has a lumpsum ammount to invest, he requires regular cash flow to help cover basic living expenses, Which type of annuity plan Amit should purchase
A
deferred Annuity
B
Money back annuity
C
Immediate Annuity
D
All of the above
Question 30
Factor which can reduce post retirement living standards in real terms is known as ________________________
A
Inflation
B
Investment Risk
C
Longevity Risk
D
Replacement Risk
Question 31
Rajni prchased a annuity plan in which she will give premium for 20 years and will get back pension from 30th years. Which type of annuity plan she has taken?
A
deferred Annuity
B
Immediate Annuity
C
All of the above
D
None of the above
Question 32
In which annuity plan the money is invested for a period of time until the annuitant is ready to receive annuities?
A
Immediate Annuity
B
Deferred Annuity
C
Open market
D
Commutation
Question 33
For which option in annuity someone can take annuity plan from a companu and get annuity from another company?
A
Immediate Annuity
B
Deferred Annuity
C
Open market
D
Commutation
Question 34
In case of life insurance, the basic contingency covered is that of __________________ .
A
mortality
B
morbidity
C
longevity
D
All of the above
Question 35
In the case of pensions, a capital sum, which we may call a corpus or total consideration gets liquidated in part or whole through its conversion into a stream of regular income payments. These are known as _____________________ .
A
annuities
B
Inflation
C
Investment Risk
D
Longevity Risk
Question 36
In the case of ________________ , a stream of premium payments results in creation of a capital sum, known as the sum assured. This sum is payable to the individual’s nominees or beneficiaries in the event of death of the individual, or may be paid as a survival benefit at the end of the term in the case of endowment policies.
A
Health Insurance
B
Pension
C
General Insurance
D
life insurance
Question 37
_____________________________ pensions are financed by taxes and contributions which all have to pay regardless of the benefit levels they receive in turn.
A
Flat rate and means tested
B
Deferred Annuity
C
Immediate Annuity
D
All of the above
Question 38
________________________________, on the other hand depends on the individual’s own contribution which is supplemented, in many cases, by State subsidies.
A
The earnings related supplementary portion
B
Flat rate and means tested
C
Deferred Annuity
D
Immediate Annuity
Question 39
Which of the below is a problem of defined benefit annuity?
A
erosion in the “Job for life” concept
B
open-ended liabilities on the employer
C
benefit that was not linked, to investment performance of the fund
D
All of the above
Question 40
A _____________________  is typically offered and purchased in the form of an annuity contract between the insurance company or other pension provider and an annuitant. The latter pays either a single premium or a series of premiums – known as annuity considerations. The pension provider pools and invests these contributions, whose principal and investment earnings lead to creation of a corpus.
A
Public Pension Fund
B
personal pension
C
Occupational Pension
D
All of the above
Question 41
________________________of pension : 1/3 rd of the accumulated value can be withdrawn at the time of retirement and is tax-free.
A
Commutation
B
personal pension
C
Occupational Pension
D
All of the above
Question 42
Commutation of pension:_____________________  of the accumulated value can be withdrawn at the time of retirement and is tax-free.
A
1/4th
B
1/5 th
C
1/6th
D
1/3 rd
Question 43
which of the below is a process to classify annuity?
A
how the annuity is purchased.
B
how often the annuity is paid.
C
when the annuity payment is due to begin.
D
All of the above
Question 44
which of the below is a process to classify annuity?
A
how the annuity is purchased.
B
how often the annuity is paid.
C
length of the payout period
D
All of the above
Question 45
which of the below is a process to classify annuity?
A
whether the annuity amount is fixed (guaranteed) or variable (contingent on investment performance)
B
how often the annuity is paid.
C
length of the payout period
D
All of the above
Question 46
What are the contingency related to pension?
A
Inflation
B
Longevity risk
C
Investment risk
D
All of the above
Question 47
What are the contingency related to pension?
A
Replacement income risk
B
Longevity risk
C
Investment risk
D
All of the above
Question 48
_______________________:Yet another challenge is to secure post retirement incomes which are in some measure linked to final salary levels. We must remember that people’s standard of living depends on what they earn and they cannot automatically change these standards when income falls. An occupational pension which offers a defined benefit that bears a decent proportion of final salary could be a viable solution to the problem.
A
Inflation
B
Replacement income risk
C
Longevity risk
D
Investment risk
Question 49
____________________:A third contingency is that posed by investment risk — the possibility of one’s retirement savings being rendered inadequate or even wiped out because the underlying investments performed badly vis-à-vis expectations. This can be on account of default by debtors and / or a fall in the market value of investments. Fixed guaranteed pensions are a way to ward off such contingencies. The insurer assumes the investment risk.
A
Inflation
B
Replacement income risk
C
Longevity risk
D
Investment risk
Question 50
____________________:This is the chance that one may live too long after retirement and outlive one’s resources. The dilemma of the old age retiree is twofold – how much old age provision one must make and where the fund must be invested.
A
Inflation
B
Replacement income risk
C
Longevity risk
D
Investment risk
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