Winona Was a Person of Average Intelligence, Education, and Experience

question 9

Multiple Choice

Winona was a person of average intelligence, education, and experience in business. She negotiated for the purchase of insurance and paid the premium. The policy was mailed to her, but before it arrived a loss was suffered. When the policy was read, Winona could not determine whether the loss was covered because the policy was too difficult to understand. The loss is:

• A) not covered unless expressly stated to be covered.
• B) covered because the insurer had an obligation to word the policy in an understandable way.
• C) not covered unless stated to be so in a rider.
• D) covered if included in an express exception to the policy.

---

Definitions:

Business Combination

The process of merging two or more companies into one, where one company survives and the others cease to exist, often aiming for strategic, operational, or financial synergies.

Inventory

The goods and materials held by a company for the ultimate goal of resale or manufacturing into final products.

Consolidated Retained Earnings

The portion of earnings generated by a company and its subsidiaries that is not distributed as dividends but reinvested in the business.

Statement of Financial Position

Another term for the balance sheet, detailing a company's assets, liabilities, and equity at a given point in time.