Adding insurance-linked securities to a portfolio can increase an investor's return without increasing its risk becaus a) The investor takes pnly a specifically defined insurable risk b) The investor receives a premium rate of return c)A secondary market exists for the securities d) Insurable risk does not correlate with other types of investment risk

When market rates of interest rise after a fixed-rate security is purchased, the value of the now-below-market, fixed-interest payments declines, so the market value of the investment falls. How would that drop in fair value be reflected in the investment account for a security classified as HTM? Would your answer change if the drop in fair value was due to worsened financial conditions at the investee?

Which of the following is TRUE?   High-risk investments always have high returns If you invest in a risky investment, you are guaranteed to have a high return.  On average, an investor will earn high returns on a low-risk investment On average across investments and over time, riskier investments have higher returns.  A high-risk investment will never have a total loss.

What is a “liquidity premium?” When do investors increase their attention to such a premium?

AAR is biased in favour of liquid investments. Select one: True O False