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Which of the Following Statements Is (Are)true Regarding Investment Returns

question 10

Multiple Choice

Which of the following statements is (are) true regarding investment returns and the underwriting cycle?
I.Investment returns have no impact upon the underwriting cycle.
II.Investment returns can lengthen the duration of a soft market by offsetting underwriting losses.


Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.

Equipment

Tangible property or assets, excluding real estate and vehicles, used in the operation of a business to produce goods or services.

Unearned Revenue

Money received by a company for goods or services yet to be delivered or provided, recorded as a liability.

Liability

An obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services, or other yielding of economic benefits in the future.

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