Question 1

_____________ is considered to be self-sustaining if it is financially and operationally independent of the reporting enterprise.

Options :

A : Retrocession

B : Reinsurance

C : Portfolio Investments

D : Foreign operation

Answer: D

Question 2

When one buys a cash instrument, for example 100 shares of ABC Inc., the payoff is linear(disregarding the impact of dividends). If share are purchased at $50 and the price appreciated to $75, we have ________ on a mark-to-mark basis.

Options :

A : Made $2500

B : Lost $2500

C : Made $2500

D : None of these

Answer: A

Question 3

Which of the following take place at the expansion stage of the industry life cycle?

Options :

A : Firm operations get more stable and dependable

B :

No rapid growth in demand C. Costs get stable rather than de

C : Costs get stable rather than decreasing or increasing

D : Sales growth decline as new products are developed

Answer: A

Question 4

The actual market value of a right will differ from its theoretical value for all of the following reasons Except for:

Options :

A : The size of the firm-s marginal tax rate

B : The amount of transactions costs incurred

C : Investor speculation

D : The irregular exercise and sale of rights over the subscription period

Answer: A

Question 5

Which projection method uses paid losses plus reserves on outstanding claims?

Options :

A : Average losses

B : Loss ratio

C : Incurred loss

D : None of the above

Answer: C