Course Hero Logo

2 self insurance is the practice of a holding

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 36 - 38 out of 357 pages.

2) Self insurance is the practice ofA) holding reserves within the firm to cover potential losses.B) CEO's holding large life insurance policies on themselves, payable to the company.C) companies in unrelated businesses forming subsidiaries to cover their insurance needs.D) purchasing insurance policies directly rather than through a broker.
3) Which of the following is a consequence of transferring risk to an insurance company?
4) Self-insurance would not provide adequate protection in which of the followingcircumstances?
5) Which of the following types of insurance does NOT involve a contract with an externalparty?
6) Which of the following should determine whether or not the firm should purchaseinsurance from an outside party?A) Only the frequency of incidentsB) The cost of the policy and the expected lossesC) Only the maximum size of incidentsD) Only the firms normal cash reserves
7) Which of the following individual situations would best justify the cost of a life insurancepolicy?
8) Which of the following types of insurance cannot be sold in the United States?
9) Workers' compensation insurance provides coverage for on-the-job injuries suffered byemployees.
10) Workers' compensation insurance protects employees income in case they are laid off orfired.
11) It is not legal for a corporation to hold life insurance policies on its employees.
12) Directors and officers insurance protects the company if key personnel die or leave thefirm for other opportunities.
13) The decision to purchase insurance is justified if the cost of the contract is less than theexpected loss.
14) How should corporations decide when to self insure against certain risks and when topurchase insurance from outside parties?

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 357 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Fall
Professor
NoProfessor
Tags
Net Present Value, The Lottery, capital budgeting projects

Newly uploaded documents

Show More

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture