Which of the Following Is an Inaccurate Statement About the Insurable

question 41

Multiple Choice

Which of the following is an inaccurate statement about the insurable interest requirement?

• A)The beneficiary named in a life insurance policy may recover under the policy if she possessed an insurable interest in the relevant person's life at the time she (the named beneficiary)procured the policy but no longer possessed the insurable interest at the time the relevant person died.
• B)When an equitable interest in a property translates into a legal interest,it is considered to be an insurable interest.
• C)Persons who are business partners are generally held to possess insurable interests in each other's lives.
• D)A policy owner may recover under a property insurance policy if he possessed an insurable interest in the relevant property at the time he procured the policy but no longer possessed the property.

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Definitions:

Cost of Capital

The imperative return rate a firm has to achieve on investment initiatives to retain its market worth and draw investment.

Target Capital Structure

The capital structure that management strives to maintain as new capital is raised. An estimate of the structure that maximizes stock price.

Preferred Stock

A category of equity in a company that ranks above common stock in terms of claims on assets and profits, typically involving stable dividend payments.

Breakpoint

A volume discount in the sales charge or load of a mutual fund, offered to investors when investments exceed a specific dollar amount.