An Insurance Company Evaluates Many Numerical Variables About a Person

question 40

Short Answer

An insurance company evaluates many numerical variables about a person before deciding on an appropriate rate for automobile insurance.A person's age is an example of a numerical variable.

---

Definitions:

Book Value

The net value of an asset or liability according to its listing in the company's balance sheet, generally equal to its original cost minus any depreciation, amortization, or impairment costs.

Book Value per Share

The equity of a company divided by the number of outstanding shares, determining the accounting value of a share of stock.

Inventory on Credit

Inventory on credit refers to the purchase of goods that will be sold in the future without paying cash upfront, creating accounts payable for the business.

Acid-Test Ratio

A stringent indicator of a company's liquidity, calculating if it can meet its short-term obligations with its most liquid assets, excluding inventory.