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Which of the Following Statements Regarding the Use of Retention

question 44

Multiple Choice

Which of the following statements regarding the use of retention is (are) true?
I.Retention is best used for loss exposures that have a low frequency and a high severity.
II.A financially strong firm can have a higher retention level than a firm whose financial position is weak.


Definitions:

Absorptions

The process by which substances take in or soak up energy or material from their surroundings, often observed in spectroscopy.

IR Absorption

The process by which molecules absorb infrared light at frequencies characteristic of their structure, used in infrared spectroscopy.

Spike

A sharp increase or sudden upward movement, as in the context of graphs, prices, or signals.

Strong and Broad

Typically refers to the characteristic appearance of certain signals in spectroscopy, indicating a large distribution of energy levels or interactions.

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