Finance

ABC Company in considering a loss control investment. The project will

ABC Company in considering a loss control investment. The project will cost $100,000. It will generate an after-tax net cash flow of $60,000 one year after investment and an after-tax net cash flow of $60,000 two years after investment. The present value of $1 received one year from today assuming a 6 percent rate is […]

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Date: September 19th, 2020

Hedge Fund Company offers a mutual fund to investors. Fund managers ar

Hedge Fund Company offers a mutual fund to investors. Fund managers are concerned about fund volatility. They analyzed the fund to determine the worst loss likely to occur in a calendar quarter, assuming a 90 percent level of confidence. The worst probable loss is known as the fund’s A) unrealized capital gain. B) value at […]

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Date: September 19th, 2020

When announcing that an enterprise risk management program would be im

When announcing that an enterprise risk management program would be implemented at XYZ Company, the president of the company observed, “We must overcome the silo mentality for the program to be successful.” The “silo mentality” refers to A) over-emphasis on pure risks and ignoring speculative risks. B) using too much of one risk treatment measure […]

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Date: September 19th, 2020

A risk manager analyzed fleet accident data to help determine which lo

A risk manager analyzed fleet accident data to help determine which loss control measures would provide the greatest safety incentives for drivers. Examining data to generate information that will help make more informed decisions is called A) predictive analytics. B) catastrophe modeling. C) sensitivity analysis. D) data mining.     ANSWER Answer: A

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Date: September 19th, 2020

West Coast Insurance writes property and liability insurance in Califo

West Coast Insurance writes property and liability insurance in California, Oregon, and Washington. These states are all susceptible to earthquakes. To help determine how much reinsurance to purchase, West Coast Insurance hired an organization to use a computer algorithm to estimate what its insured losses would be if a severe earthquake occurred. West Coast Insurance […]

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Date: September 19th, 2020