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Which of the Following Statements About the Payment of Defense

question 43

Multiple Choice

Which of the following statements about the payment of defense costs by the PAP is (are) true?
I.They are paid in addition to the policy limits.
II.They are payable even after the limit of liability is exhausted.


Definitions:

Retention Ratio

The proportion of a company's net income that is retained rather than paid out as dividends, indicating reinvestment back into the company.

Return on Assets

A financial ratio that indicates how profitable a company is relative to its total assets.

Internal Growth Rate

The maximum rate at which a company can expand using only internal financing without resorting to borrowing or selling equity.

Dividend Payout Ratio

The fraction of earnings a company pays out to its shareholders as dividends, represented as a percentage of its net income.

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