Author name: Administrator

3000. Operating Leverage is the response of changes in __________

EBIT to the changes in sales
EPS to the changes in EBIT
Production to the changes in sales
None of the above
✅ The correct answer is A.
Operating Leverage is the response of changes in EBIT to the changes in sales. Operating leverage is a cost-accounting formula that measures the degree to which a firm or project can increase operating income by increasing revenue.

3003. What is the incorrect statement out of the following ones?

Agent’s report is not always compulsory
Agent’s report should contain details of proposer’s health, habits, occupation, income, and family
An agent is a primary underwriter from the insurer’s point of view
Prospectus is a legal document
✅ The correct answer is A.
Agent’s report is always compulsory in insurance.

3004. A building jointly owned is called office________.

layout
condominium
accommodation
location
✅ The correct answer is B.
A condominium, usually shortened to condo, is a type of real estate divided into several units that are each separately owned, surrounded by common areas jointly owned.

3006. Which is the most important component of IT?

Information
People
Information technology
Computers
✅ The correct answer is B.
People is the most important component of IT. Their human-resource systems shine! People play a vital role in most operational systems and processes. Knowledge, skills and attitudes often determine the quality and quantity of system output.

3008. The marketplace for auction sites is best described as __________.

many sites attaining similar levels of profitability
easy to enter due to minimal barriers
populated mostly with small, thriving specialty sites
dominated by a handful of sites with established networks
✅ The correct answer is D.
The marketplace for auction sites is best described as dominated by a handful of sites with established networks.

3010. In arbitrage pricing theory, higher required rate of return is usually paid on stock

higher market risk
higher dividend
lower dividend
lower market risk
✅ The correct answer is B.
In arbitrage pricing theory, higher required rate of return and higher dividend is usually paid on stock. The Arbitrage Pricing Theory (APT) is a theory of asset pricing that holds that an asset’s returns can be forecasted with the linear relationship of an asset’s expected returns and the macroeconomic factors that affect the asset’s risk.

3012. Which of the following constitute Breach of Utmost Good faith?

Non-Disclosure
Misrepresentation
Both A & B
None of the above
✅ The correct answer is C.
Misrepresentation and non-disclosure constitute breach of utmost good faith. In an insurance policy, misrepresentation on the behalf of the insured gives the insurance company a right to terminate the policy. Non-disclosure means failure to divulge a relevant fact when applying for an insurance policy. This is a violation of the principle of good faith which should be observed in insurance negotiations.
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