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Chapter 7

Terms in this set (17)

Common Stock prices are or are not volatile
very volatile
Common Stock tends to earn more or less money for investors in the long run
more
Market Conditions have caused a downward turn in the value of an insurer's equity investments. This loss will be included at fair value in the insurers
Policyholders surplus
What is true about coupon payments of Treasury Inflation Protected Securities
Coupon payments increase or decrease with inflation
Based on fundamental analysis, which one of the following is most likely to have a negative effect on price of a stock
Decrease in institutional ownership
Marketplace sets a bonds current price and YTD. What risk factors are considered?
credit risk, liquidity risk, term to maturity
What are some other addtional factors that determind a bonds YTM
Real rate of return and inflation risk
How are the the prices of bond and market price correlated?
Negatively
What type of bonds are known as secured bonds
mortgage and asset backed bonds
Fundamental Analysis
Method used to determine the price of stock by analyzing datat that are fundamental to the company such as growth, dividend payouts, risk and interest rates
What is the carrying value for Available For Sale Securities
Fair Value
Why would an insurer designate its bonds as available for sale
to support its investment strategy of selling bonds in reponse to changes in interest rates
Where are realized gains or losses on available for sale securites and held to maturity securities included
net income
How are held to maturity securities valued under GAAP
Amortized Cost
What are trading securites
equity stocks bonds that an organization holds for a short period of time
How are trading securities valued under GAAP
Fair Value
List in order the priority over claims if a firm declares bankruptcy
Creditors, Preferred stock holders, Common stock holders
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