Reserving Liabilities Involves the Calculation of the Amount That the Insurer

question 14

Multiple Choice

Reserving liabilities involves the calculation of the amount that the insurer needs to set aside to pay future claims.The investment side includes decisions about asset allocation to achieve the best rate of return on the assets entrusted to the insurer by the policyholders seeking the security.The allocation of assets is necessary to meet the timing of the claims obligations.This activity is called:

• A)gentrification.
• B)due diligence.
• C)redlining.
• D)asset-liabilities matching.
• E)blockbusting.

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Definitions:

Mean

The arithmetic average of a set of numbers, calculated by dividing the sum of the numbers by the count of numbers.

Confidence Interval

A confidence interval is a range of values derived from sample statistics that is likely to contain the value of an unknown population parameter, with a specified level of confidence.

Confidence Level

The probability or likelihood, expressed as a percentage, that a specified interval will contain the true population parameter.

Mean Width

An average measure of the width of a set of objects or figures, calculated by summing the widths and dividing by the number of objects.