AU 60 Missed Questions Chapter Final
UPDATED ACTUAL Questions and
CORRECT Answers
When insuring a partnership, it is essential to identify which one of the following on the policy
declaration page?
Choose one answer.
A. The partnership
B. All partners
C. General partners only
D. All partners and their share of the partnership - CORRECT ANSWER - A. The
partnership
If a company's inventory turnover ratio is higher than the industry benchmark, it indicates that
Choose one answer.
A. Its inventory is becoming obsolete compared to that of its competitors.
B. The company is holding its inventory longer than its competitors.
C. The company is selling its inventory more quickly than its competitors.
D. The company's inventory is generating higher costs than that of its competitors. - CORRECT
ANSWER - C. The company is selling its inventory more quickly than its competitors.
, Which one of the following is determined by a company's underwriting policy?
Choose one answer.
A. The underwriting authority the insurer grants its producers
B. Composition of the insurer's book of business
C. The market pursued by the insurer
D. The rating organization to which the insurer will belong - CORRECT ANSWER - B.
Composition of the insurer's book of business
Which one of the following statements is true regarding ratemaking in different types of
insurance?
Choose one answer.
A. Most losses from catastrophic events, such as hurricanes, are included in ratemaking data in
the affected states.
B. Trending of losses in fire insurance is generally restricted to claim severity.
C. The experience period used for property causes of loss other than fire is usually five years or
less.
D. Applying loss development factors to data is critical when claims settle quickly and loss
reserves are relatively small. - CORRECT ANSWER - B. Trending of losses in fire
insurance is generally restricted to claim severity.
Which one of the following types of individual rating plans can be used by medium to large
insureds in combination with risk control and allows the insured to manage its cash flow by
avoiding upfront payments?
UPDATED ACTUAL Questions and
CORRECT Answers
When insuring a partnership, it is essential to identify which one of the following on the policy
declaration page?
Choose one answer.
A. The partnership
B. All partners
C. General partners only
D. All partners and their share of the partnership - CORRECT ANSWER - A. The
partnership
If a company's inventory turnover ratio is higher than the industry benchmark, it indicates that
Choose one answer.
A. Its inventory is becoming obsolete compared to that of its competitors.
B. The company is holding its inventory longer than its competitors.
C. The company is selling its inventory more quickly than its competitors.
D. The company's inventory is generating higher costs than that of its competitors. - CORRECT
ANSWER - C. The company is selling its inventory more quickly than its competitors.
, Which one of the following is determined by a company's underwriting policy?
Choose one answer.
A. The underwriting authority the insurer grants its producers
B. Composition of the insurer's book of business
C. The market pursued by the insurer
D. The rating organization to which the insurer will belong - CORRECT ANSWER - B.
Composition of the insurer's book of business
Which one of the following statements is true regarding ratemaking in different types of
insurance?
Choose one answer.
A. Most losses from catastrophic events, such as hurricanes, are included in ratemaking data in
the affected states.
B. Trending of losses in fire insurance is generally restricted to claim severity.
C. The experience period used for property causes of loss other than fire is usually five years or
less.
D. Applying loss development factors to data is critical when claims settle quickly and loss
reserves are relatively small. - CORRECT ANSWER - B. Trending of losses in fire
insurance is generally restricted to claim severity.
Which one of the following types of individual rating plans can be used by medium to large
insureds in combination with risk control and allows the insured to manage its cash flow by
avoiding upfront payments?
