What is not essential to the creation of an agency relationship?
a. Agreement to pay consideration.
b. Consent of the principal.
c. Competency of the principal.
d. A fiduciary relationship.
Answer: a. Agreement to pay consideration.
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Which of the following statements is NOT true regarding decision trees?
A. Decision trees should only be used for new-product decisions when no uncertainty is present. B. Decision trees can be used for other management problems besides product design. C. A decision tree is a great tool for thinking through a problem. D. Decision trees are particularly helpful when there are a series of decisions and various outcomes that lead to su...
An insurance company that sells earthquake insurance in an area where earthquakes are possible has subjected itself to the risk of insolvency if a severe earthquake occurs
An insurer can safely sell earthquake insurance in this area if it shifts the risk of catastrophic loss to another insurer. The shifting of insured risk from one insurer to another insurer is called A) underwriting. B) casualty insurance. C) coinsurance. D) reinsurance.