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Which of the Following Statements About the Investments of Property

question 27

Multiple Choice

Which of the following statements about the investments of property and liability insurers is (are) true?
I.Income from investments is important in offsetting any unfavorable underwriting experience.
II.Because premium income is continually being received,the investment objective of liquidity is of little importance.


Definitions:

Total Variable Cost

Total Variable Cost is the sum of all costs that vary with the level of production, such as materials and labor directly involved in the production.

Average Fixed Costs

The total fixed costs of production divided by the quantity of output produced, which decreases as production increases.

Total Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, or insurance premiums.

Silk Flower Arrangements

Artificial flower displays made from silk and other materials, designed to replicate the appearance of natural flowers.

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