In an Effort to Minimize the Cost of Conventional Property/casualty

question 38

Multiple Choice

In an effort to minimize the cost of conventional property/casualty insurance, Epic Electronics decided to manage their risk by self-insuring. The most likely way Epic would try to do this would be to

• A) cover small and medium-sized losses itself, and carry conventional insurance only for catastrophic losses.
• B) carry insurance for the small, routine losses and pay for any highly unusual major losses with its own funds.
• C) buy an insurance policy that covers all risks.
• D) establish a well-monitored loss-prevention program.

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Definitions:

Independent And Dependent Variables

In experimental research, the independent variable is the factor that is manipulated to see its effect on the dependent variable, which is the outcome being measured.

Ratio Level

A measurement scale that has a true zero point and equal intervals, allowing for the calculation of ratios.

Nominal Level

The simplest level of measurement, which involves categorizing or naming variables without implying any rank or order among them.

Dividing

The mathematical operation of allocating a quantity into equal parts, essentially determining how many times one number is contained within another.