The Costs of Catastrophic Events Continue to Increase Primarily Because

question 4

Multiple Choice

The costs of catastrophic events continue to increase primarily because:

• A) more people are moving into more hazardous areas.
• B) not enough people pay for insurance in hazardous areas to even out the costs.
• C) insurance companies are not making enough profit to satisfy their shareholders.
• D) insurance companies are refusing to insure most natural hazard losses.
• E) natural hazards are becoming more difficult to understand.

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Definitions:

Commercial Paper

Commercial paper is a short-term, unsecured promissory note issued by corporations, typically used for the financing of accounts receivable, inventories, and meeting short-term liabilities.

Discount Period

The time frame during which a seller offers a buyer a reduction from the normal cost of a good or service, often to incentivize prompt payment.

Cash Sales

Cash sales refer to transactions where payment is made in full with cash at the time of the sale, without any credit.

Cheque Processing Time

The period it takes from when a cheque is issued until the funds are available in the payee’s account, reflecting bank processing durations.