Which of the Following Is an Accurate Statement About Property

question 34

Multiple Choice

Which of the following is an accurate statement about property insurance policies?

• A)They are less likely to provide coverage for flood-related losses than for lightning-related losses.
• B)They are more likely to provide coverage for losses resulting from friendly fires than for losses resulting from hostile fires.
• C)They do not provide coverage for losses resulting from fires that were intentionally caused by persons having no connection with the insured.
• D)Requisite insurable interest must generally exist at the time of the entering into the policy.

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Definitions:

Coupon

The stated interest payment made on a bond.

Options Traded

Financial derivatives that give the buyer the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price within a certain period of time.

Right to Buy

A privilege granted to shareholders or options holders to purchase additional shares within a company at a predetermined price and time.

All-Equity Firm

A company that finances its operations and investments solely through equity without any debt financing.