Question

What is the purpose of using stock market investments to leverage capital gain?

a.

To increase the cost of administration

b.

To increase the exposure to capital loss

c.

To decrease the return from the investment portfolio

d.

To earn a better return from the investment portfolio

Posted under IC85 Reinsurance Management

Answer: (d).To earn a better return from the investment portfolio Explanation:Stock market investments can increase an investor's exposure to capital loss and the cost of administration. However, investors can earn higher returns depending on their risk-taking ability. As a result, using stock market investments to leverage capital gain can help achieve a better return from the investment portfolio. This is because the stock market can provide higher returns than other investment options, such as bonds or real estate, but it also involves more risk. By investing in the stock market, investors can potentially earn higher returns on their investments and leverage their capital gain.

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