ABC Insurance Retains the First $1 Million of Each Property

question 4

Multiple Choice

ABC Insurance retains the first $1 million of each property damage loss and purchases reinsurance for that part of any property loss that exceeds $1 million.The insurance for property losses above $1 million is called

• A)excess insurance.
• B)liability insurance.
• C)coinsurance.
• D)primary insurance.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with fixed dividends.

Dividend

A portion of a company's earnings, decided by the board of directors, to be distributed among shareholders.

Stock Price

The cost of purchasing a single share of a company's stock on the open market.

Bonds Outstanding

Refers to the total amount of bonds that are currently issued by a corporation or government and not yet redeemed.