Savings element

Definition:

Used in the context of life insurance, the cash value built up in a policy, which equals the amount of premium paid minus the cost of protection. This excess is invested by the insurance company, and the returns are tax-deferred inside the policy.

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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Measurement error

Errors in measuring an explanatory variable in a regression, which leads to biases in estimated parameters.

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