Question

46.Which of the following is covered under 'Additional Coverages' of a homeowners policy?

Select one:

a. Loss caused to or by glass or safety glazing material

b. The neighbor's lawnmower that you have borrowed

c. Homes plagued with toxic mold which needs lengthy remediation

d. Attached garage

e. Detached garage

47.Reserving liabilities involves the calculation of the amount that the insurer needs to set aside to pay future claims. It's equivalent to the _____ of a nonfinancial firm.

Select one:

a. assets

b. reserves

c. market value

d. equity

e. debt

48.Under this common law defense, if an employee was injured through negligence of the employer but was partly at fault, the employer was relieved of responsibility for the injury. Identify this common law defense.

Select one:

a. Fellow-servant rule

b. Assumption of risk

c. Attractive nuisance

d. Concurrent negligence

e. Contributory negligence

49.Which of the following refers to activities that are taken to reduce or eliminate risks?

Select one:

a. Securitization

b. Amortization

c. Depreciation

d. Hedging

e. Risk retention

50.In compromising between the interests of employees and those of employers, the originators of workers' compensation systems limited the benefits available to employees to some amount less than the full loss. They also made those benefits the sole recourse of the employee against the employer for work-related injuries. This give-and-take of rights and duties between employers and employees is termed:

Select one:

a. quid pro quo.

b. stare decisis.

c. ratio decidendi.

d. uberrimae fidei.

e. obiter dictum.

Answer 1

46. The correct answer will be option (a)Loss caused to or by glass or safety glazing material. It is the only option that is covered under 'Additional Coverages' of a homeowners policy. The other options (b), (c), (d) and (e) are not covered under 'Additional Coverages' of a homeowners policy.

47. The correct answer will be option (e) debt. It is because when a non financial firm starts reserving liabilities which involves the calculation of the amount that the insurer needs to set aside to pay future claims then it is it's debt.The other options (a), (b), (c) and (d) are not correct due to the above reason.

48. The correct answer will be option (e) contributory negligence. It is because if an employee was injured through negligence of the employer but was partly at fault, the employee was guilty of contributory negligence. Any contributory negligence, regardless of how slight, relieved the employer of responsibility for the injury.The other options (a), (b), (c) and (d) are not correct due to the above reason.

49. The correct answer will be option (d) Hedging. It is because hedging is a risk management strategy employed to offset losses in investments by taking an opposite position in a related asset. The other options (a), (b), (c) and (e) are not correct due to the above reason.

50. The correct answer is option (a) quid pro quo. It is because the give-and-take of rights and duties between employers and employees is termed quid pro quo (Latin for “this for that”). The intent was for the give and take to have an equal value on an average. The other options (b), (c), (d) and (e) are not correct due to the above reason.