Which of the Following Statements About Retrospective Rating Is True

question 1

Multiple Choice

Which of the following statements about retrospective rating is true?

• A)The premium for the current period is determined by the loss experience for prior periods.
• B)The premium for the current period is determined by the loss experience during the current period.
• C)The premium for future periods is determined by the average loss experience for the current and previous periods.
• D)The premium for future periods is determined by the loss experience for the current period.

Determine the relationship between fixed costs, variable costs, average costs, and their behaviors over the output level.

Understand the concept of opportunity costs and how they are composed of both explicit and implicit costs.

Differentiate between explicit costs and implicit costs, including examples of each.

Calculate and differentiate between accounting profits and economic profits.

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Definitions:

Commission

A fee or percentage of a transaction paid to an agent or employee for facilitating or completing a sale.

Accrued Interest

Interest that has accumulated but remains unpaid.

360-Day Year

A financial convention that simplifies interest calculation by assuming a year has 360 days.

Commission

A fee paid for services, usually a percentage of the total cost.