The Risk Insured by ________ Is Insurance Against Financial Loss

question 37

Multiple Choice

The risk insured by ________ is insurance against financial loss caused by damage, destruction, or loss to property as the result of an identifiable event that is sudden, unexpected, or unusual.

• A) long-term health care companies
• B) disability insurance companies
• C) umbrella insurance companies
• D) property and casualty insurance companies

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Definitions:

Unsecured Bonds

Bonds issued without collateral, relying solely on the issuer's creditworthiness.

General Credit

General credit refers to the overall ability of a borrower to obtain loans from lenders based on creditworthiness and past financial behavior.

Stockholder Claims

The rights or interests that shareholders have in a company, primarily related to dividends and assets in the event of liquidation.

Bondholders

Individuals or institutions that own bonds issued by corporations or governments, entitling them to receive the bond's principal back plus interest payments.