Helen Has a $40,000 Automobile Collision Policy with a $750

question 14

Multiple Choice

Helen has a $40,000 automobile collision policy with a $750 deductible. If her car is involved in an accident costing her $15,000 to repair the damages, ________ is the amount she will have to pay to receive coverage for the damages from the insurer.

• A) $750
• B) $39,250
• C) $40,000
• D) $14,250

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Definitions:

Quality

A measure of excellence or a state of being free from defects, deficiencies, and significant variations, brought by strict and consistent adherence to measurable and verifiable standards.

Bid-ask Spread

The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask) for an asset.

Market Maker

A firm or individual who actively quotes two-sided markets, providing bids and offers along with the market size of each.

Profit Maximizing

The process of making business decisions that result in the highest possible profit, by adjusting production levels, prices, and other variables.