Which of the Following Is NOT a Possible Result When

question 21

Multiple Choice

Which of the following is NOT a possible result when a property & casualty company purchases reinsurance?

• A)improved capital position.
• B)limits on losses on reinsured policies.
• C)stabilized cash flows.
• D)dilution of earnings per share.
• E)All of these are possible results of purchasing reinsurance.

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Definitions:

Selling Division

The division or department within a company responsible for the sales and distribution of its products or services.

Outside Customers

Individuals or entities that purchase goods or services from a business but are not part of the business itself.

Variable Expenses

Variable expenses are costs that change in proportion with the level of activity or production volume, such as materials and labor costs.

Transfer Price

The price at which goods and services are sold between divisions within the same company, influencing the financial performance of each division.