3-91 Which of the Following Arises in Policies in Which

question 89

Multiple Choice

3-91 Which of the following arises in policies in which the insured event occurs during a coverage period but a claim is not filed or reported until many years later?

• A)Short-tail losses.
• B)Adverse selection.
• C)Moral hazard.
• D)Long-tail losses.
• E)Social inflation.

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Definitions:

EOQ Inventory System

The Economic Order Quantity (EOQ) model is a formula used to determine the optimal quantity of inventory to minimize total inventory costs including holding and ordering costs.

Safety Stock

Inventory kept on hand to protect against shortages due to fluctuations in demand or supply.

Carrying Cost

The total cost of holding inventory, including storage, insurance, and taxes, over a certain period.

Average Inventory Levels

The mean stock of goods held by a company over a certain period, used to manage inventory efficiently and minimize holding costs.