Loss Severity Is Defined as the

question 22

Multiple Choice

Loss severity is defined as the

• A)probable size of the losses which may occur during some period.
• B)probable number of losses which may occur during some period.
• C)probability that any particular piece of property may be totally destroyed.
• D)probability that a liability judgment may exceed a firm's net worth.

Understand the role of the Federal Reserve Board in regulating the money supply and its impact on the economy.

Recognize the effects of Federal Reserve Board's policies on economic activity and inflation.

Identify the major regulatory acts that influence the operations of financial institutions and the credit market.

Understand the difference between credit and debit card usage and their impact on personal finances.

---

Definitions:

Liabilities

Financial obligations or debts that a business or individual owes to others.

Assets

Resources owned by a business or individual that have economic value and can provide future benefits.

Taxable Income

The portion of an individual's or organization's income that is subject to taxation by governing authorities.

Horizontal Equity

Horizontal equity is a principle in taxation that dictates that individuals with similar income and assets should pay the same amount in taxes.