1. A variable life insurance policy provides a death benefit ______________.

A. plus cash value that can be invested in mutual funds
B. plus a gradual buildup of cash value
C. plus the option to increase or decrease the premium or the death benefit
D. that varies with the policy holder's stage in the life cycle

2. In an investment management process, forming capital market expectations is one of the steps in:

A. execution
B. feedback
C. implementation
D. planning

3. Major asset classes include all of the following except:

A. real estate    
B. certificates of deposit
C. precious metals
D. fixed-income securities.

4. The risk tolerance of pension funds depends on:

A. life cycle    
B. proximity of payouts
C. variableness of the fund
D. interest spread

5. A passive approach to portfolio management is based on the concept that ____________.

A. asset allocation should be applied only to fixed-income investments    
B. investors can consistently identify undervalued securities
C. security prices are generally close to fair levels
D. investment management involves asset allocation and security selection

Answers:      1 (A), 2 (D), 3 (B), 4 (B), 5 (C)

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