Bob Is Twenty-Five Years Old and Has a Forty-Year-Old Uncle

question 149

Multiple Choice

Bob is twenty-five years old and has a forty-year-old uncle who has recently entered his second adolescence.Bob is close to his uncle,although the uncle does not provide Bob with any support.Within the past year,Bob's uncle has obtained a divorce,bought a large customized motorcycle,and begun smoking and drinking heavily.In addition,he patronizes bars known for periodic violence.Bob decides that taking out a life insurance policy on his uncle would be a good investment.In this situation:

• A) Bob has an insurable interest in his uncle, because of the close family relationship.
• B) Bob has an insurable interest, but only if he is named in his uncle's will to receive assets from his uncle's estate.
• C) Bob does not have an insurable interest, because he took out the policy only after his uncle's lifestyle change.
• D) Bob does not have an insurable interest, because the relationship is too remote, and he receives no support from the uncle.
• E) Bob does not have an insurable interest, because parents and children are the only persons who can have an insurable interest in the life of another person.

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Definitions:

Shareholder Theory

A theory in business ethics suggesting that the primary responsibility of a company is to maximize the wealth of its shareholders.

Triple Bottom Line Theory

A sustainability framework that examines a company's social, environmental, and financial performance, aiming to measure the broader impact of the company's activities.

Dividend Payments

Distributions of earnings made to shareholders by corporations, usually in the form of cash or additional shares.

Manufacturing Expenses

Costs associated with producing goods, including raw materials, labor, and overhead.