A Fair Insurance Policy Is One Whose Premium

question 158

Multiple Choice

A fair insurance policy is one whose premium:

• A)is zero.
• B)allows the insurance company to profit.
• C)equals the expected value of the claims.
• D)is higher as the probability of a claim decreases.

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Definitions:

Goes Public

The process by which a privately-held company offers its shares to the public for the first time, through an initial public offering (IPO).

Stock Issue

The process by which a company distributes new shares to investors, either through a public offering or privately, to raise capital.

Potential Investors

Individuals or entities that may consider investing capital into a business, project, or security.

Tranches

Tranches are divisions or portions of debt or securities designed to divide risk or group characteristics in a way that is appealing to different investors.