Fin 431 - Sample First Exam (2006)

Fin 431 - Sample First Exam (2006) - UNIVERSITY OF ILLINOIS...

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UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN College of Business DEPARTMENT OF FINANCE Sample First Exam Finance 431 Name:_______________________ Spring, 2006 Maximum Number of Points: 30 For this exam, you may use either the State Farm Car Policy we used in Finance 230 or the Personal Auto Policy included as Appendix B in the text. To make sure you are graded fairly, please circle the policy you are using for this exam: State Farm Car Policy Personal Auto Policy True/False and Multiple Choice Questions - Circle the appropriate answer (1 point each). 1. State Farm is a proprietary insurer. T F 2. Net investment income includes realized capital gains (losses). T F 3. An underwriter determines that an applicant for insurance has T F poor moral character. The underwriter would then be concerned that this applicant might engage in insurance fraud. 4. The Gramm-Leach-Bliley act is Federal legislation that applies T F to insurance companies. 5. Intentional torts are not covered by liability insurance policies. T F 6. Which of the following loss reserve methods consider past loss payment development patterns in setting the current loss reserve? Indicate all that apply. A. Case reserve plus B. Expected loss ratio method C. Chain ladder method D. Bornhuetter-Ferguson method E. Excess-of-loss method
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7. The risk manager of a manufacturing firm is working with an insurance broker to place coverage for the firm’s liability risks. Which step in the risk management process does
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Fin 431 - Sample First Exam (2006) - UNIVERSITY OF ILLINOIS...

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