A company has a fleet of 500 vehicles. On average, 75 vehicles per year experience property damage. What is the probability that any vehicle will be damaged in any given year?

A) 10 percent

B) 20 percent

C) 25 percent

D) 50 percent

Millie is risk manager of JKL Company. She is considering an investment in a loss control project. The project will cost $80,000. Assuming a 10 percent discount rate, the present value of the future net cash flows that this project will generate is $95,000. What is the net present value (NPV) of this project?

A) $15,000

B) $16,3636

C) $6,3636

D) $175,000

Which of the following statements concerning regulatory objectives for rate making is (are) true?

1: Rates must not be unfair discriminatory.

2: Rates must not be adequate.

A) 1 only

B) 2 only

C) 1 and 2

D) neither 1 or 2.

ABC Insurance Company's investment income ratio last year was 11.2 percent. The company's combined ratio last year was 109.1 percent. What was ABC's overall operating ratio?

A) 102.3 percent

B) 79.9 percent

C) 97.9 percent

D) 120.3 percent