Which of the Following Liability Risks Would Be Adequately Managed

question 44

Multiple Choice

Which of the following liability risks would be adequately managed by errors and omissions insurance?

• A) liabilities arising from the performance of obligations of corporate directors and officers
• B) liabilities arising from negligence in the provision of professional services
• C) the insured's portion of the loss that is insured against out of his or her own assets
• D) the cost of the environmental cleanup of the insured's property arising from business activities

Recognize factors affecting option pricing such as volatility and time decay.

Learn how to calculate the hedge ratio and its significance in options trading.

Understand the concept of protective puts and how to replicate them with stock and T-bills.

Recognize the significance of risk-free arbitrage opportunities in mispriced options.

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Definitions:

Unrelated

Not connected or associated, often used to describe variables that do not influence each other.

Majority

More than half of a total number or quantity; often used in the context of votes, opinions, or demographics.

Independent

A term in statistics and research denoting a variable that is manipulated or controlled in an experiment to observe its effect on the dependent variable.

Weekly Income

The total amount of money earned or received by an individual or entity in one week.