Practice Quiz

Health and Life Insurance

Category - Annuities & Policies

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Bob purchases 500 accumulation units at $1.00 per unit. If the value of the accumulation units increases to $2.50 each, how many accumulation units will Bob own?
  1. 200 units
  2. 500 units
  3. 1250 units
  4. The value has nothing to do with the number Bob purchased
Explanation
Answer: B - If the value of Bob’s accumulation units increases to $2.50 each, the number of units Bob owns is still 500. These 500 units are now worth more than when Bob purchased them. In the same way, if the value decreases, Bob will still own 500 units; however, they will be each be worth less.
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