Finance

Scott had trouble obtaining auto insurance. After three companies refu

Scott had trouble obtaining auto insurance. After three companies refused to insure him, he called the state insurance department. A representative suggested he obtain coverage through Last Chance Insurance Company because “that’s all they insure—high-risk drivers.” Scott contacted Last Chance. He was not refused coverage; however, the premium Scott was required to pay was three […]

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Date: September 19th, 2020

In the state where Susan lives, drivers whom private insurance compani

In the state where Susan lives, drivers whom private insurance companies do not want to insure are placed in a common pool, and each insurer pays its pro rata share of pool losses and expenses. A common policy is used for all high-risk drivers. Susan’s state handles high-risk drivers through a(n) A) automobile insurance plan. […]

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Date: September 19th, 2020

Which of the following statements is (are) true with respect to the us

Which of the following statements is (are) true with respect to the use of credit-based insurance scores as an auto insurance rating factor? I. Insurers claim that drivers who have poor insurance scores are expected to have relatively more accidents. II. The use of insurance scores has been banned as a rating factor in all […]

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Date: September 19th, 2020

Disadvantages of automobile insurance plans include which of the follo

Disadvantages of automobile insurance plans include which of the following? I. High premiums may cause many high-risk drivers to go uninsured. II. Large underwriting profits have resulted in high-risk drivers subsidizing the cost of insurance for good drivers in the voluntary markets. A) I only B) II only C) both I and II D) neither […]

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Date: September 19th, 2020

Stock W has the following returns for various states of the economy:

Stock W has the following returns for various states of the economy: State of the Economy Probability Stock W’s Return Recession 10% -30% Below Average 20% -2% Average 40% 10% Above Average 20% 18% Boom 10% 40% Stock W’s standard deviation of returns is A) 20% B) 14%. C) 17%. D) 10%.     ANSWER […]

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Date: September 19th, 2020

A few states have dual automobile insurance systems. A motorist can pa

A few states have dual automobile insurance systems. A motorist can pay a higher premium and retain the right to sue under the tort system, or pay a lower premium and be covered under the state’s no-fault law. This dual system is called a A) pure no-fault plan. B) modified no-fault plan. C) “no pay, […]

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Date: September 19th, 2020