Which of the Following Is the Correct Calculation of the Insurance

question 18

Multiple Choice

Which of the following is the correct calculation of the insurance premium?

• A) Insured Loss Claims + Loading Expenses + Fair Rate of Return - Investment Income
• B) Insured Loss Claims + Loading Expenses + Investment Income - Fair Rate of Return
• C) Insured Loss Claims - Loading Expenses - Investment Income + Fair Rate of Return
• D) Insured Loss Claims - Loading Expenses + Fair Rate of Return + Investment Income

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Definitions:

t-Table

A table used in statistics that shows the critical values of the t-distribution, used in hypothesis testing and constructing confidence intervals.

Degrees of Freedom

The number of independent values or quantities that can vary in an analysis without violating any constraints.

Mean

The arithmetic average of a set of values, calculated by summing up all the values and then dividing by the number of values.

F Distribution

A probability distribution that arises in the analysis of variances for comparing sample variances or testing the hypothesis of equal variances, used primarily in ANOVA.