You are a provider of portfolio insurance and are establishing a 4-year program. The portfolio you manage is worth $110 million, and you hope to provide a minimum return of 0%. The equity portfolio has a standard deviation of 23% per year, and T-bills pay 5% per year. Assume that the portfolio pays no dividends.

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A: The term "payback period" refers to the amount of years that must pass before the initial monetary…

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A: This pertains to capital budgeting. Payback period is a popular capital budgeting tool.

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A: Discounted payback period is one of the capital budgeting methods to evaluate a project.

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Types of Insurance Contract

Insurance is a contract wherein an individual or entity gets financial protection from the insurance company for any damages or losses incurred. The individual or entity is called the insured, whereas the insurance company is called the insurer. The insured and the insurer enter a legal contract for a fixed term called the insurance term, and the contract is called an insurance policy.