Which of the Following Statements Is TRUE with Respect to Insurance

question 33

Multiple Choice

Which of the following statements is TRUE with respect to insurance?

• A) The phrase "self- insure" refers to the fact that a company has purchased an insurance company that covers all of its employees, rather than requiring those employees to individually insure themselves.
• B) First party insurance and third party insurance may both apply to the same set of events.
• C) Liability insurance imposes a duty of utmost good faith on the insured party, but property insurance does not.
• D) The phrase "third party insurance" refers to the fact that an insurance company used an agent to sell a policy to a customer.
• E) The phrase "first party insurance" refers to the fact that the insured party must immediately contact the insurance company after being sued for a type of loss that the insurance policy covers.

Distinguish between the different phases of dominance structuring and their specific precautions.

Apply critical thinking strategies to improve decision-making processes.

Understand the implications of pre-editing phase actions on final decision outcomes.

Appreciate the psychological aspects influencing decision maker’s bias towards a selected option.

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Definitions:

Vanguard Index 500

A mutual fund that aims to mirror the performance of the S&P 500, managed by Vanguard.

Passive Investment

An investment strategy involving minimal buying and selling, aiming to benefit from long-term market returns with low fees.

Four-factor Model

A financial model that expands the three-factor model (market risk, size risk, and value risk) by adding a momentum factor to explain stock returns.

Fama and French Factors

Fama and French factors are three factors—market risk, size risk, and value risk—used in explaining portfolio returns beyond the market risk measured by beta.