Which of the following statements about the traditional net cost method of measuring the cost of life insurance is (are) true?
I. The traditional net cost method does not consider the time value of money.
II. The traditional net cost method can show that life insurance has a negative cost.
A) I only
B) II only
C) both I and II
D) neither I nor II
Question 2
Which of the following statements about the Linton yield is (are) true?
I. It is based on the assumption that a cash-value policy can be viewed as a combination of insurance protection and a savings fund.
II. It is the average compound annual rate of return required to make the savings deposits in a life insurance policy equal to the policy's guaranteed cash value at the end of a specified period.
A) I only
B) II only
C) both I and II
D) neither I nor II
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