Insurance Brokerage Company Uses a Computer-Based Method of Estimating the Losses

question 23

Multiple Choice

Insurance Brokerage Company uses a computer-based method of estimating the losses its clients will suffer if a severe storm or earthquake occurs.This method of estimating losses is called

• A)capital budgeting.
• B)securitization of risk.
• C)risk mapping.
• D)catastrophe modeling.

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Definitions:

Transfer Price

The internal charge assigned to the exchange of goods or services between the departments or divisions of the same organization, affecting both profitability and tax liabilities.

Outside Supplier

An external entity or company that provides goods or services to another company, often part of the supply chain.

Idle Capacity

Unused production capacity, indicating available resources that are not currently being utilized.

Transfer Price

Transfer price refers to the price charged for goods or services transferred between departments or divisions within the same company or between affiliated entities.