An Insurance Company Evaluates Many Numerical Variables About a Person

question 72

Short Answer

An insurance company evaluates many numerical variables about a person before deciding on an appropriate rate for automobile insurance.How long a person has been a licensed driver is an example of a numerical variable.

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Definitions:

Spot Market

The Spot Market is a public financial market in which financial instruments or commodities are traded for immediate delivery.

Foreign Currency

The currency of another country, which is required for foreign trade and investment.

Hedge

An investment or action taken to reduce the risk of adverse price movements in an asset.

Exchange Rate Exposure

The potential for a company's profitability, net cash flow, and market value to change because of a change in exchange rates.