All of the following are important underwriting principles EXCEPT:
a. selection according to the company's underwriting standards
b. proper balance within each rate classification
c. selection of risk that can be written at standard rates
d. equity among policyowners
Answer: c. selection of risk that can be written at standard rates
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Many firms use on-the-job training to teach their employees computer programming. Suppose you work in the personnel department of a firm that just finished training a group of its employees to program, and you have been requested to review the performance of one of the trainees on the final test that was given to all trainees. The mean of the test scores is 76. Additional information indicated
that the median of the test scores was 86. What type of distribution most likely describes the shape of the test scores? A) skewed to the right B) skewed to the left C) unable to determine with the information given D) symmetric
In which of the following situations would the largest amount be recorded as an expense of the current year? (Assume accrual basis accounting.)
A. $4,000 is paid in January for equipment with a useful life of four years. B. $1,800 is paid in January for a two-year fire insurance policy. C. $1,200 cash dividends are declared and paid. D. $900 is paid to an attorney for legal services rendered during the current year.