You plan to go to Asia to visit friends in three years. The trip is expected to cost a total of $10,000 at that time. Your parents have deposited $5,000 for you in a Certificate of Deposit paying 6% interest annually, maturing three years from now. Uncle Lee has agreed to pay for all remaining […]
Date: September 19th, 2020
Bill was severely injured by an uninsured driver. Bill did not purchase uninsured motorists coverage, and the other driver, although held liable, could not pay the damages awarded. After exhausting other sources of recovery, Bill learned that his state is one of a few states that has a special fund to compensate innocent accident victims. […]
Date: September 19th, 2020
A state law that requires individuals who have been involved in an auto accident or who have been convicted for certain vehicle-related offenses to demonstrate the ability to pay liability claims up to a specified dollar amount is called a(n) A) financial responsibility law. B) compulsory insurance law. C) unsatisfied judgment fund law. D) “no […]
Date: September 19th, 2020
The computation of return on equity, or ROE, does not include retained earnings as part of common equity because retained earnings includes all net income for the company since its inception and analysts are trying to calculate the return for just the current year. Indicate whether the statement is true or false ANSWER […]
Date: September 19th, 2020
When the corporation sells securities directly to the investment public without involving an investment banker, it is called a privileged subscription. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
All of the following are major rating factors for determining private passenger automobile insurance premiums EXCEPT A) gender. B) age. C) race. D) marital status. ANSWER Answer: C
Date: September 19th, 2020
Which of the following statements about reinsurance facilities for insuring high-risk drivers is (are) true? I. Underwriting losses in the reinsurance facility are shared by all auto insurers in the state. II. An insurer must accept all applicants for insurance, but the insurer has the option of placing high-risk drivers in the reinsurance pool. A) […]
Date: September 19th, 2020
A zero coupon bond pays no annual coupon interest payments. When it matures at the end of 7.5 years it pays out $1,000. If investors wish to earn 2.35% per year on this bond investment, what is the current price of the bond? (Round to the nearest dollar.) A) $875 B) $561 C) $840 D) […]
Date: September 19th, 2020
Which of the following statements about automobile insurers that specialize in insuring high-risk motorists with poor driving records is (are) true? I. The actual premium paid by an applicant is set by the federal government and is independent of an applicant’s driving record. II. The coverages available may be more limited than those written by […]
Date: September 19th, 2020
Sharon lives in a state that has a no-fault automobile insurance law. Under the law, an injured person has the right to sue the negligent driver only if the bodily injury claim exceeds a dollar or verbal threshold. The no-fault law in Sharon’s state is a(n) A) pure no-fault plan. B) modified no-fault plan. C) […]
Date: September 19th, 2020
