LOMA 308 EXAM PAPER 2025/2026 QUESTIONS WITH
SOLUTIONS GRADED A+
✔✔Pension plan - ✔✔An arrangement under which a plan sponsor provides plan
participants w a lifetime income benefit that begins at retirement
✔✔Stocks - ✔✔A security that represents an ownership interest in a company
✔✔Bonds - ✔✔A security that represents a debt that the borrower (the issuer) owes to
the bond holder (the buyer)
✔✔Commercial paper - ✔✔A financial instrument that consists of short term, unsecured
promissory notes issued to businesses or govts by corporations as an alternative to
short term bank loans
✔✔Full service broker dealer - ✔✔A BD that provides investment advice and planning
services in addition to handling customer transactions
✔✔Discount broker dealer - ✔✔A BD that executes customer buy/sell orders but
doesn't offer investment advice
✔✔Installment credit - ✔✔A form of credit offered to borrowers that requires the
borrower to make payments in specified amounts for a specified period of time
✔✔Non installment credit - ✔✔A form of credit offered to borrowers that doesn't require
the borrower to make payments of a specified amount on a prearranged schedule
✔✔Asset accumulation product - ✔✔A financial product that allows owners to increase
the amount and/or value of their assets over time
✔✔Disinflation - ✔✔A decrease in the rate of inflation
✔✔Real rate of interest - ✔✔The difference b/w the nominal or stated rate of interest
and the expected inflation rate
✔✔Guaranteed interest crediting rate - ✔✔The min interest rate an insurer will pay on a
fixed annuity's accumulation value
✔✔Current interest crediting rate - ✔✔The interest rate prevailing in the economy.
Generally offered on a fixed annuity for a specified period of time
✔✔Disintermediation - ✔✔A process in which large numbers of people withdraw funds
from financial intermediaries in order to invest in instruments yielding higher returns
, ✔✔Spread expansion - ✔✔The widening of an insurer's interest spread
✔✔Fiscal policy - ✔✔The use of govt spending and taxation to change aggregate
demNd
✔✔Expansion fiscal policy - ✔✔The type of fiscal policy that is used to increase
aggregate demand in order to increase the pace of the exonomy
✔✔Contractionary fiscal policy - ✔✔The type of fiscal policy that is used to decrease
aggregate demand in order to slow down the economy
✔✔Budget surplus - ✔✔A budget in which govt revenues exceed govt expenditures in a
given time period
✔✔Stock insurance - ✔✔An insurance company that is owned by the people and
organizations that purchase shares of the company's stock
✔✔Mutual insurance - ✔✔An insurance company that is owned by its policyowners
✔✔Fraternal benefit societies - ✔✔An organization formed to provide social and
insurance benefits to its members
✔✔Mutualization - ✔✔The conversion of a stock insurance company to a mutual
insurance company
✔✔SWOT analysis - ✔✔An analysis in which a company weighs company strengths
and weaknesses against environmental opportunities and threats
✔✔Strategic business unit - ✔✔An area of business distinct from other areas within a
company in that it generates its own profits, has its own separate set of customers and
competitors, has its own management and is capable of having its own goals and
strategies
✔✔Shared service - ✔✔A functional areas that performs specified business processes
for multiple strategic business units and that shares accountability for the costs, timing
and quality of those processes w the SBUs
✔✔Unity of command - ✔✔A management principle stating that employees should have
only one manager to avoid confusion
✔✔Control cycle - ✔✔A repetitive process designed to ensure that all areas of a
company adhere to the company's performance standards
SOLUTIONS GRADED A+
✔✔Pension plan - ✔✔An arrangement under which a plan sponsor provides plan
participants w a lifetime income benefit that begins at retirement
✔✔Stocks - ✔✔A security that represents an ownership interest in a company
✔✔Bonds - ✔✔A security that represents a debt that the borrower (the issuer) owes to
the bond holder (the buyer)
✔✔Commercial paper - ✔✔A financial instrument that consists of short term, unsecured
promissory notes issued to businesses or govts by corporations as an alternative to
short term bank loans
✔✔Full service broker dealer - ✔✔A BD that provides investment advice and planning
services in addition to handling customer transactions
✔✔Discount broker dealer - ✔✔A BD that executes customer buy/sell orders but
doesn't offer investment advice
✔✔Installment credit - ✔✔A form of credit offered to borrowers that requires the
borrower to make payments in specified amounts for a specified period of time
✔✔Non installment credit - ✔✔A form of credit offered to borrowers that doesn't require
the borrower to make payments of a specified amount on a prearranged schedule
✔✔Asset accumulation product - ✔✔A financial product that allows owners to increase
the amount and/or value of their assets over time
✔✔Disinflation - ✔✔A decrease in the rate of inflation
✔✔Real rate of interest - ✔✔The difference b/w the nominal or stated rate of interest
and the expected inflation rate
✔✔Guaranteed interest crediting rate - ✔✔The min interest rate an insurer will pay on a
fixed annuity's accumulation value
✔✔Current interest crediting rate - ✔✔The interest rate prevailing in the economy.
Generally offered on a fixed annuity for a specified period of time
✔✔Disintermediation - ✔✔A process in which large numbers of people withdraw funds
from financial intermediaries in order to invest in instruments yielding higher returns
, ✔✔Spread expansion - ✔✔The widening of an insurer's interest spread
✔✔Fiscal policy - ✔✔The use of govt spending and taxation to change aggregate
demNd
✔✔Expansion fiscal policy - ✔✔The type of fiscal policy that is used to increase
aggregate demand in order to increase the pace of the exonomy
✔✔Contractionary fiscal policy - ✔✔The type of fiscal policy that is used to decrease
aggregate demand in order to slow down the economy
✔✔Budget surplus - ✔✔A budget in which govt revenues exceed govt expenditures in a
given time period
✔✔Stock insurance - ✔✔An insurance company that is owned by the people and
organizations that purchase shares of the company's stock
✔✔Mutual insurance - ✔✔An insurance company that is owned by its policyowners
✔✔Fraternal benefit societies - ✔✔An organization formed to provide social and
insurance benefits to its members
✔✔Mutualization - ✔✔The conversion of a stock insurance company to a mutual
insurance company
✔✔SWOT analysis - ✔✔An analysis in which a company weighs company strengths
and weaknesses against environmental opportunities and threats
✔✔Strategic business unit - ✔✔An area of business distinct from other areas within a
company in that it generates its own profits, has its own separate set of customers and
competitors, has its own management and is capable of having its own goals and
strategies
✔✔Shared service - ✔✔A functional areas that performs specified business processes
for multiple strategic business units and that shares accountability for the costs, timing
and quality of those processes w the SBUs
✔✔Unity of command - ✔✔A management principle stating that employees should have
only one manager to avoid confusion
✔✔Control cycle - ✔✔A repetitive process designed to ensure that all areas of a
company adhere to the company's performance standards
