Finally, Xu and Anderson consider a hedge fund that specializes in reinsurance and life settlements. Xu tells Anderson about three characteristics that hedge fund managers look for when investing in life settlements:
Characteristic 1 The surrender value offered to the insured individual is relatively high.
Characteristic 2 The ongoing premium payments to keep the policy active are relatively low.
Characteristic 3 There is a high probability that the designated insured person is likely to die within the period predicted by standard actuarial methods.
Which of the three characteristics of life settlements noted by Anderson is correct?
A Characteristic 1 B Characteristic 2 C Characteristic 3
