One of Waata's Staff Members Has Been Out on Sick

question 99

Multiple Choice

One of Waata's staff members has been out on sick leave because she had an emergency appendectomy. She brought the hospital bills in to Waata for his opinion. It seems she had been covered by two health insurance policies for some time and now she thinks she may be able to collect from both companies in payment for the operation. Waata assured his employee that

• A) she could look forward to a check from both companies once they had paid the medical bills.
• B) because of the rule of indemnity she would not be able to profit from her operation.
• C) because of the law of large numbers both insurance companies would pay her directly.
• D) because her risk was insurable, she would be able to collect from both insurance policies.

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Definitions:

Rate of Return

The positive or negative financial outcome of an investment over a specific period, expressed in terms of a percentage of the cost of investment.

EPS

EPS stands for Earnings Per Share, a financial ratio that indicates the portion of a company's profit allocated to each outstanding share of common stock.

Marginal Tax Bracket

The tax rate that applies to the last dollar of the taxpayer's income, indicating additional taxes on future earnings.

Annual Dividends

Annual dividends refer to the total dividend payments a company makes to its shareholders in a given fiscal year, representing a share of the profits distributed.