When a Reinsurer Covers the Layer of Hurricane Losses for an Insurance

question 12

Multiple Choice

When a reinsurer covers the layer of hurricane losses for an insurance company between $20 million and $30 million, which of the following describes the insurance company's losses?

• A) A bull spread on total hurricane losses
• B) A bear spread on total hurricane losses
• C) A long call option on total hurricane losses
• D) A short put option on total hurricane losses

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Definitions:

Erikson

A psychologist known for his theory on the psychosocial development of human beings, which outlines eight stages from infancy to adulthood.

Intimacy Versus Isolation

A stage in Erik Erikson's theory of psychosocial development where adults face the challenge of forming close relationships or risk feeling isolated.

Love

A complex set of emotions, behaviors, and beliefs associated with strong feelings of affection, protectiveness, warmth, and respect for another person.

Developmental Tasks

Specific achievements that individuals are expected to accomplish at certain periods in their life according to societal norms and values.