Quiz Week 2

What is insurance primarily defined as?

• A monthly payment system

• A contract providing financial protection

• A government requirement

• A savings account alternative

What is portfolio diversification primarily used for?

• Maximizing short-term profits

• Eliminating all investment risk

• Reducing overall investment risk

• Guaranteeing fixed returns

Which type of IRA requires tax payment upon withdrawal?

• Traditional IRA

• Roth IRA

• Investment IRA

• Municipal IRA

What distinguishes a sole proprietorship from other business types?

• Shared liability

• Multiple owners

• Highest tax rate

• Single owner with unlimited liability

Which insurance type is legally required in California?

• Health insurance

• Property insurance

• Basic liability auto insurance

• Life insurance

What is a mutual fund?

• A government bond

• A pooled investment managed professionally

• A type of insurance policy

• A retirement account

What is a key feature of a limited partnership?

• Equal profit sharing

• Reduced input for less profit

• Unlimited liability

• Single project focus and temporary

What is a deductible in insurance?

• Monthly premium payment

• Amount paid before insurance covers

• Total coverage amount

• Annual bonus payment

What is undiversifiable risk also known as?

• Company risk

• Systematic risk

• Individual risk

• Operational risk

Which business structure has a board of directors?

• Sole proprietorship

• Partnership

• Corporation

• Joint venture