Which of the Following Statements Referring to the Loss Ratio

question 24

Multiple Choice

Which of the following statements referring to the loss ratio are true?

• A)The loss ratio measures the actual losses incurred on a line of insurance business.
• B)A common measure of the overall underwriting profitability of a line of insurance business is the loss ratio.
• C)The loss ratio measures the pure losses incurred on a line of insurance business relative to premiums earned.
• D)The loss ratio measures the predicted losses incurred on a line of insurance business relative to premiums earned.

---

Definitions:

Overnight Mail

Overnight mail is a shipping service that guarantees delivery of a package or letter to its destination by the next business day.

Loads of Laundry

Units or batches of clothing, linens, and other textiles laundered together in a single process.

Pages

Physical or digital sheets on which written or printed information is displayed; not a standard economic term.

Opportunity Cost

Opportunity cost is the cost of forgoing the next best alternative when making a decision to pursue a certain action.