1.Which of the following affects the level of insurance premiums?
a. probability of loss
b. value of loss
c. expected operating expenses
d. all of the above
 

2. Which of the following is likely to be a material component of an insurer’s revenue?
a. interest on bonds
b .interest on mortgages
c. dividends on stocks
d. all of the above

 

3. “Objective risk” is
a. synonymous with “pure risk”
b. determined according to principles of probability and statistics
c. uninsurable
d. synonymous with “speculative risk”


 

4. The “Law of Large Numbers” is
a. a statistical principle relied on by insurers in managing objective risk
b. an informal rule of thumb for valuing pure risks
c. a principle of portfolio diversification that helps manage interest rate risk
d. none of the above


    • 8 years ago
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