March 25
LOMA 308 Module 1-3 Exam Complete Questions and Correct
Detailed Answers (Verified Answers)
sole proprietorship
Ans: A business that is owned and operated by one person.
privately held company
Ans: A company in which ownership is restricted to specified individuals. Contrast
with publicly held company.
partnership
Ans: A type of company that is owned and operated by two or more people (the
partners) who jointly earn all company profits and are responsible for all company
debts.
corporation
Ans: A legal entity, separate from its owners, that is created by the authority of a
government and that continues beyond the death of any or all of its owners.
publicly held company
Ans: A company that sells ownership shares to the public. Contrast with privately
held company.
Requirements for Incorporation
pg. 1
, March 25
Ans: 1. A description of the company, including its name, location, plan for
organizing operations, and the type of business it intends to conduct
2. The names of the company's original directors
3. The amount of initial investment being made by company owners
Purpose of Licensing
Ans: 1. Financially sound and able to meet its obligation to policyowners
2. Directed by knowledgeable and capable managers
stock insurance company
Ans: An insurance company that is owned by the people and organizations that
purchase shares of the company's stock .
mutual insurance company
Ans: An insurance company that is owned by its policyowners.
fraternal benefit society
Ans: An organization formed to provide social and insurance benefits to its
members.
mutualization
Ans: The conversion of a stock insurance company to a mutual insurance company.
pg. 2
, March 25
mission statement
Ans: A written statement that descibes a company's fundamental purpose or reason
for being.
management
Ans: The process that companies use to plan, organize, and control operations
effectively and efficiently.
planning
Ans: The process of evaluating business opportunities, assessing resources,
determining goals, and developing strategies for implementation and control.
SWOT
Ans: Strengths, Weaknesses, Opportunities, Threats
corporate objective
Ans: A statement of a long-term result a company plans to achieve.
SWOT analysis
Ans: In planning, an analysis in which a company weighs company strengths and
weaknesses against environmental opportunities and threats.
strategic business unit (SBU)
pg. 3
, March 25
Ans: An area of business distinct from other areas within a company in that it
generates its own profits, has its own separate set of customers and competitors, has
its own management, and is capable of having its own goals and strategies.
organizational chart
Ans: A visual display of the various jobs and the formal lines of authority and
reporting within a company.
board of directors
Ans: A group of individuals elected by a company's owners that serves as the
company's primary governing body.
Narrow Span of Control
Ans: It's usually most effective when employees:
1. Work in different locations
2. Perform different and complex tasks
3. Need focused supervision
However, an extremely narrow span can result in too much supervision, slow decision
making, and little employee initiative.
Wide Span of Control
pg. 4
LOMA 308 Module 1-3 Exam Complete Questions and Correct
Detailed Answers (Verified Answers)
sole proprietorship
Ans: A business that is owned and operated by one person.
privately held company
Ans: A company in which ownership is restricted to specified individuals. Contrast
with publicly held company.
partnership
Ans: A type of company that is owned and operated by two or more people (the
partners) who jointly earn all company profits and are responsible for all company
debts.
corporation
Ans: A legal entity, separate from its owners, that is created by the authority of a
government and that continues beyond the death of any or all of its owners.
publicly held company
Ans: A company that sells ownership shares to the public. Contrast with privately
held company.
Requirements for Incorporation
pg. 1
, March 25
Ans: 1. A description of the company, including its name, location, plan for
organizing operations, and the type of business it intends to conduct
2. The names of the company's original directors
3. The amount of initial investment being made by company owners
Purpose of Licensing
Ans: 1. Financially sound and able to meet its obligation to policyowners
2. Directed by knowledgeable and capable managers
stock insurance company
Ans: An insurance company that is owned by the people and organizations that
purchase shares of the company's stock .
mutual insurance company
Ans: An insurance company that is owned by its policyowners.
fraternal benefit society
Ans: An organization formed to provide social and insurance benefits to its
members.
mutualization
Ans: The conversion of a stock insurance company to a mutual insurance company.
pg. 2
, March 25
mission statement
Ans: A written statement that descibes a company's fundamental purpose or reason
for being.
management
Ans: The process that companies use to plan, organize, and control operations
effectively and efficiently.
planning
Ans: The process of evaluating business opportunities, assessing resources,
determining goals, and developing strategies for implementation and control.
SWOT
Ans: Strengths, Weaknesses, Opportunities, Threats
corporate objective
Ans: A statement of a long-term result a company plans to achieve.
SWOT analysis
Ans: In planning, an analysis in which a company weighs company strengths and
weaknesses against environmental opportunities and threats.
strategic business unit (SBU)
pg. 3
, March 25
Ans: An area of business distinct from other areas within a company in that it
generates its own profits, has its own separate set of customers and competitors, has
its own management, and is capable of having its own goals and strategies.
organizational chart
Ans: A visual display of the various jobs and the formal lines of authority and
reporting within a company.
board of directors
Ans: A group of individuals elected by a company's owners that serves as the
company's primary governing body.
Narrow Span of Control
Ans: It's usually most effective when employees:
1. Work in different locations
2. Perform different and complex tasks
3. Need focused supervision
However, an extremely narrow span can result in too much supervision, slow decision
making, and little employee initiative.
Wide Span of Control
pg. 4
