Course 4 May 2000 Multiple Choice Exams
Course 4 May 2000 Multiple Choice Exams
Course 4 May 2000 Multiple Choice Exams
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6. A jewelry store has obtained two separate insurance policies that together provide full coverage.<br />
You are given:<br />
(i) The average ground-up loss is 11,100.<br />
(ii)<br />
Policy A has an ordinary deductible of 5,000 with no policy limit.<br />
(iii) Under policy A, the expected amount paid per loss is 6,500.<br />
(iv) Under policy A, the expected amount paid per payment is 10,000.<br />
(v) Policy B has no deductible and a policy limit of 5,000.<br />
Given that a loss less than or equal to 5,000 has occurred, what is the expected payment under<br />
policy B?<br />
(A) Less than 2,500<br />
(B) At least 2,500, but less than 3,000<br />
(C) At least 3,000, but less than 3,500<br />
(D) At least 3,500, but less than 4,000<br />
(E) At least 4,000<br />
COURSE/EXAM 4: MAY <strong>2000</strong> - 6 - GO ON TO NEXT PAGE
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