Part II: Multiple choice (2.5 marks, 0.5 each) (Lo's ALBL CI) 1. Marwa purchased a laptop two years ago that was recently stolen. A similar laptop computer today can be purchased for $1400. Assuming that the laptop was 40 percent depreciated at the time the theft occured, what is the actual cash value of the loss? a. $480 b. $560 c. $840 d. $1,960 2. If a risk manager is estimating the frequency and severity of losses, this means he she is: a. Identifying risks b. Measuring and analyzing risks c. Treating risks d Implementing controls 3. A total loss under a valued policy is settled on the basis of the a. Fair market value of the loss. b. Actual cash value at the time of loss. c. Replacement cost less depreciation. d. Amount of insurance stated in the policy. 4. All of the following statements about the rules govering agency relationships are true EXCEPT . An agent must be authorized to act on behalf of a principal. b. An agency agreement may have certain limitations on the agents power. c. An agent can represent only one insurer. d. Knowledge of the agent is presumed to be knowledge of the insurer. 3. Which of the following is not a contract of indemnity? a. Health insurance b. Life insurance c. Replacement cost insurance d. Liability insurance