The Operating Ratio Is Calculated as

question 21

Multiple Choice

The operating ratio is calculated as

• A)the loss ratio minus the underwriting cycle lag.
• B)the loss ratio plus the loss adjustment expense ratio plus the commission to premium ratio.
• C)the combined ratio after dividends minus the investment yield.
• D)the combined ratio minus the loss ratio.
• E)none of these options are correct.

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Definitions:

Speculative

Involving financial actions that carry a significant risk of losing all value but also hold the promise of substantial gains.

Ratings

Assessments or evaluations used to rank or score entities based on certain criteria, such as financial strength or quality.

Money Market Instruments

Financial instruments that provide liquidity and short-term financing in the money market, such as treasury bills, commercial paper, and certificates of deposit.

High-risk Securities

Financial instruments that offer a high potential return but also present a higher likelihood of loss.