art mcqs

If a policy document is lost, then

by
A) Claim may be settled on the basis of an indemnity bond
B) An advertisement may have to be placed in a newspaper if the amount to be paid is high
C) Both A & B
D) None of the above
✅ ANSWER: C
If a policy document is lost, then claim may be settled on the basis of an indemnity bond and an advertisement may have to be placed in a newspaper if the amount to be paid is high.

State which is correct out of the following

by
A) A Term Insurance policy cannot be convered into any other policy during its duration
B) Term policy is available both a separate policy and as a rider in another policy
C) Term policy can be issued with lifelong renewability option
D) All Term covers will have a disability rider
✅ ANSWER: B
Term policy is available both a separate policy and as a rider in another policy.

Choose the correct statement.

by
A) Lower yields are a disadvantage in cash value contracts
B) Discipline in saving is not an advantage in cash value contracts
C) Income Tax advantage is not an advantage in cash value contracts
D) Safe and secure investment is not an advantage in cash value contracts
✅ ANSWER: A
Lower yields are a disadvantage in cash value contracts. Whole life insurance is significantly more expensive. Premiums are often much higher than a term life insurance policy with the same amount of coverage because you’re paying for an insurance policy as well as putting money into the cash value portion of the policy.

The weak form of the EMH is supported if successive price changes over time are________.

by
A) independent of each other
B) negative
C) positive
D) lagged
✅ ANSWER: A
The weak form of the EMH is supported if successive price changes over time are independent of each other. The efficient-market hypothesis (EMH) is a theory in financial economics that states that asset prices fully reflect all available information.

Which of the following is untrue as per IRDA’s regulations on non-par policies?

by
A) The benefits shall be stated at the outset
B) The benefits shall be linked to some index
C) The additional benefit under these policies shall be laid out at the outset
D) The return shall be stated at the beginning of the contract itself
✅ ANSWER: B
The benefits of an insurance policy are not linked to any index. Hence, option (2) is the correct answer.

While calculating weighted average cost of capital _________.

by
A) Preference shares are given more weight age
B) Cost of issue is considered
C) Tax factor is ignored
D) Risk factor is ignored
✅ ANSWER: B
While calculating weighted average cost of capital cost of issue is considered. Weighted average cost of capital ( WACC) is the average after-tax cost of a company’s various capital sources used to finance the company.

In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s price is below the firm’s own ______________.

by
A) Fixed Cost
B) Variable Cost
C) Total Cost
D) Prime Cost
✅ ANSWER: B
In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s price is below the firm’s own Variable Cost. A variable cost is a corporate expense that changes in proportion to production output. Variable costs increase or decrease depending on a company’s production volume; they rise as production increases and fall as production decreases.

Depreciable amount + Residual value of a fixed asset = ?

by
A) Depreciation expenses
B) Accumulated depreciation
C) Cost of the fixed asset
D) Future economic benefits of a fixed asset
✅ ANSWER: C
Depreciable amount + Residual value of a fixed asset = Cost of the fixed asset. Fixed assets are depreciated only to the extent of their depreciable amount, which equals cost minus the salvage value.

What are the correct statements?

by
A) Bancassurance model can either be a bank forming an insurance company on its own or acting as an agent for another Insurance company without capital participation
B) Such an agency of bank acting for an insurer is known as corporate agency
C) A commercial bank is not barred from acting as an agent for insurance companies
D) All of the above
✅ ANSWER: D
All the statements are correct.
Bancassurance model can either be a bank forming an insurance company on its own or acting as an agent for another Insurance company without capital participation, Such an agency of bank acting for an insurer is known as corporate agency and A commercial bank is not barred from acting as an agent for insurance companies.