Alley Katz Cancels Her Six-Month Auto Policy Exactly Four Months

question 24

Multiple Choice

Alley Katz cancels her six-month auto policy exactly four months into the policy period. If her six month premium was $900,how much will she receive as a refund of unused premium from her insurer?

• A)$300
• B)$450
• C)An amount less than $300, to reflect the short-rate cancellation penalty the insurer will impose
• D)None of the above

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Definitions:

Money Supply

The complete financial resource pool available in an economy at a particular period.

Central Banks

Central banks are national financial institutions that manage a country's currency, money supply, and interest rates, overseeing its monetary policy.

Money Supplies

The overall financial assets tally in an economy at a given point.

Money Supply Curve

A graphical representation showing the relationship between the quantity of money in the economy and the interest rate.