LOMA 291 Module 4 Questions with
Complete Solutions
Corporate stock equity security, ownership interest in issuing company, investor makes
money from stockholder dividends and capital gains
Stockholder dividends payments to stockholders of portion of corp. yearly earnings
Capital gains returns from selling stock for more than it was bought
Portfolios collections of assets w/ given objective
General account asset portfolio, insurer bears investment risk, supports guaranteed
products
Separate account asset portfolio, customer bears investment risk, supports variable
products
, Subaccounts portion of insurer's separate account, consists of pool of investments w/
distinct investment strategy, customers pick these offered by insurer, similar to mutual fund
Internal audit systematic exam of company's records, processes, controls by company
employees
Internal financial audit specialized internal audit, look at if financial records are fair and
accurate, control procedures and if they're being followed, if assets are safeguarded, meeting
compliance obligations
Insolvency business can't meet financial obligations on time, Not enough assets relative to
liabilities, Might have enough assets, but not enough cash to cover costs now
Solvency can pay financial obligations on time
Assets things of value - cash, securities, buildings, land
Liabilities debts, obligations, amounts payable to customers
Complete Solutions
Corporate stock equity security, ownership interest in issuing company, investor makes
money from stockholder dividends and capital gains
Stockholder dividends payments to stockholders of portion of corp. yearly earnings
Capital gains returns from selling stock for more than it was bought
Portfolios collections of assets w/ given objective
General account asset portfolio, insurer bears investment risk, supports guaranteed
products
Separate account asset portfolio, customer bears investment risk, supports variable
products
, Subaccounts portion of insurer's separate account, consists of pool of investments w/
distinct investment strategy, customers pick these offered by insurer, similar to mutual fund
Internal audit systematic exam of company's records, processes, controls by company
employees
Internal financial audit specialized internal audit, look at if financial records are fair and
accurate, control procedures and if they're being followed, if assets are safeguarded, meeting
compliance obligations
Insolvency business can't meet financial obligations on time, Not enough assets relative to
liabilities, Might have enough assets, but not enough cash to cover costs now
Solvency can pay financial obligations on time
Assets things of value - cash, securities, buildings, land
Liabilities debts, obligations, amounts payable to customers
