As a Result of Frequent Flooding,the Insurance Market Has Noted

question 122

Multiple Choice

As a result of frequent flooding,the insurance market has noted a positive correlation between flooding and the amount of insurance monies paid out for such floods.Moreover,the probability of such flooding has been increasing.As a result,homeowners in flood plains will find that flood insurance:

• A)is easy to acquire and relatively inexpensive.
• B)is very costly and relatively difficult to find.
• C)premiums have not changed since the insurance continues to offer the same coverage.
• D)is relatively expensive but easy to acquire.

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Definitions:

Profit Margin

A financial ratio indicating the percentage of revenue that exceeds the costs associated with making or buying the goods sold.

DuPont Formula

A formula used to provide a detailed analysis of Return on Equity (ROE) by breaking it down into three major components: operating efficiency, asset use efficiency, and financial leverage.

Investment Turnover

A measure of a company's efficiency in using its investments in assets to generate sales revenue, calculated as sales divided by average total assets.

Profit Margin

A metric in finance that reveals the percent of sales revenue that remains after deducting the cost of goods sold, illustrating the profit-making ability of a business.