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An Insurance Company Evaluates Many Numerical Variables About a Person

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An insurance company evaluates many numerical variables about a person before deciding on an appropriate rate for automobile insurance.The number of tickets a person has received in the last 3 years is an example of a numerical variable.


Definitions:

Stock Split

A corporate action that increases the number of a corporation's outstanding shares by dividing each share, which in turn diminishes its price.

American Call Option

A financial derivative allowing the buyer the right, but not the obligation, to buy a specific stock or asset at a predetermined price within a certain time period.

Underlying Asset

The security or asset on which a derivative contract is based, influencing its value and characteristics.

Exercise Price

The predetermined price at which an option's underlying asset can be bought or sold.

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