An Insurance Company Would Not Be Willing to Insure a Risk

question 23

Multiple Choice

An insurance company would not be willing to insure a risk if it

• A) results from political disruptions.
• B) has a measurable loss.
• C) results from an accident.
• D) has a low probability of occurring.

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Definitions:

Pure Interest Yield

The portion of interest or return on an investment that represents the compensation for the time value of money, excluding any other types of returns or costs.

Investment Choices

decisions made by individuals or entities about where to allocate resources, including money or capital, to generate a return or achieve financial objectives.

Expectation Profit

The anticipated financial gain or potential that an investment or business venture may generate in the future, based on certain assumptions or forecasts.

Present Value

The today's value of future money or cash flows, determined by applying a chosen rate of return.