Which of the following statements about Dwelling Property 1 (basic form) is true? A) Coverage on the dwelling is written on a replacement cost basis. B) The full amount of personal property coverage applies to property away from the insured premises. C) Coverage for fair rental value of the dwelling is subject to both an […]
Which of the following statements is (are) true concerning the home business insurance coverage endorsement? I. It increases the coverage on business personal property at the insured residence from $2,500 to the Coverage C limit. II. It excludes coverage for liability arising out of the home business. A) I only B) II only C) both […]
John purchased an unendorsed Homeowners 3 policy. The coverage will expire next month. Which of the following changes will lower the premium that John will pay? A) reducing the deductible B) adding a replacement cost endorsement for personal property C) switching to an HO-2 policy D) adding a personal injury endorsement ANSWER Answer: […]
The main duties of financial managers are: A) assessing the current business situation and future financing needs. B) developing long-term financing strategies. C) assessing future investments. D) All of the above. ANSWER D
Which of the following statements regarding Section II conditions under the homeowners policy is true? A) Other insurance is handled on a pro rata basis. B) Under no circumstances may the insured bring a lawsuit against the insurer. C) The liability limit is the same regardless of the number of persons injured in a covered […]
A credit-based score that is highly predictive of future claims cost is an individual’s A) CLUE score. B) insurance score. C) motor vehicle record score. D) underwriting score. ANSWER Answer: B
Which of the following statements is (are) true concerning the use of an individual’s credit history as an insurance rating factor? I. Individuals with poor credit histories, as a group, generally file fewer homeowners claims than do individuals with good credit histories. II. A poor credit history can be improved over time, allowing for the […]
Which of the following is NOT a common characteristic of issuing short-term debt? A) Issuing short-term debt increases uncertainty compared to a long-term fixed-rate issue. B) Issuing short-term debt provides more frequent financing opportunities. C) Short-term interest rates are typically HIGHER than long-term rates. D) Short-term debt financing could be problematic in the event of […]
The category of securities with the highest historical risk premium is A) small company stocks. B) small company corporate bonds. C) large company stocks. D) government bonds. ANSWER A
The investment banker does NOT underwrite the securities to be issued in which of the following? A) firm commitment B) initial public offering C) best efforts D) primary market transaction ANSWER C
