Which of the Following Statements Is TRUE with Respect to Property

question 29

Multiple Choice

Which of the following statements is TRUE with respect to property insurance?

• A)A benefit paid by an insurer to an insured is called a premium.
• B)Property insurance is called third party coverage if one person buys insurance with respect to property that is owned by another person.
• C)Property insurance is called first party coverage only if the insurer sold the policy to a human being, rather than a corporation.
• D)A benefit may be paid under a property insurance policy even if the insured is entitled to sue a third party for causing the loss or damage in question.
• E)Property insurance is available for real property, but not personal property.

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Definitions:

Cash Flow from Operations

The cash generated by a company’s normal business operations.

Initial Investment

The initial amount of money spent to start a project or investment, often used as a baseline for calculating future returns.

Net Present Value

A calculation used to assess the profitability of an investment, considering the present value of its cash inflows and outflows over time.

Discount Rate

It refers to the discount rate applied in discounted cash flow analysis to calculate the current value of future cash flows.