Premium Bases Expense Rates MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Premium Bases Expense Rates, a fundamental topic in the field of IC 92 Actuarial Aspects of Product Development. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Premium Bases Expense Rates MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Premium Bases Expense Rates mcq questions that explore various aspects of Premium Bases Expense Rates problems. Each MCQ is crafted to challenge your understanding of Premium Bases Expense Rates principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 92 Actuarial Aspects of Product Development tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Premium Bases Expense Rates MCQs are your pathway to success in mastering this essential IC 92 Actuarial Aspects of Product Development topic.

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Premium Bases Expense Rates MCQs | Page 7 of 9

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Q61.
How are initial expenses, renewal expenses, and termination expenses further split according to?

a.

The number of new business or inforce policies

b.

The amount of new business or inforce premium

c.

The amount of new business or inforce sum assured

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Initial expenses, renewal expenses, and termination expenses are further split according to the number of new business or inforce policies, the amount of new business or inforce premium, and the amount of new business or inforce sum assured.
Q62.
How are investment expenses typically expressed?

a.

As a fixed amount per policy

b.

As a percentage of funds under management

c.

As a percentage of annual premium

d.

As a percentage of sum assured

Discuss
Answer: (b).As a percentage of funds under management Explanation:Investment expenses are typically expressed as a percentage of funds under management.
Q63.
In expense analysis, what can be the subdivisions for which the analysis is conducted?

a.

Only the whole business of the life insurance company

b.

Only the whole business of a particular accounting fund

c.

Only each main product line of the company

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:In expense analysis, the subdivisions for which the analysis is conducted can include the whole business of the life insurance company, the whole business of a particular accounting fund, or each main product line of the company.
Q64.
How should the subdivision chosen for expense analysis be?

a.

As small as possible

b.

As large as possible

c.

So small that the analysis becomes unreliable

d.

So large that the analysis becomes unreliable

Discuss
Answer: (c).So small that the analysis becomes unreliable Explanation:The subdivision chosen for expense analysis should not be so small that the analysis becomes unreliable.
Q65.
How can salaries expenses be split in expense analysis?

a.

Based on the number of policies sold

b.

Based on the premium income generated

c.

Based on the work division within different subgroups

d.

Based on the company's profits

Discuss
Answer: (c).Based on the work division within different subgroups Explanation:Salaries expenses can be split based on the work division within different subgroups in expense analysis.
Q66.
How is the concept of "notional rent" relevant in expense analysis?

a.

It represents the actual rental cost paid by the company for its office buildings.

b.

It signifies the potential rental income that the company could earn from its owned buildings.

c.

It refers to the expenses incurred for heating, lighting, and cleaning of office buildings.

d.

It represents the costs associated with computer usage in the company.

Discuss
Answer: (b).It signifies the potential rental income that the company could earn from its owned buildings. Explanation:The concept of "notional rent" in expense analysis refers to the potential rental income that the company could earn from its owned buildings.
Q67.
How are computer costs typically allocated in expense analysis?

a.

Based on the number of policies sold

b.

Based on the premium income generated

c.

Based on computer usage or the number of employees

d.

Based on the company's profits

Discuss
Answer: (c).Based on computer usage or the number of employees Explanation:Computer costs are typically allocated in expense analysis based on computer usage or the number of employees.
Q68.
How are investment costs typically allocated in expense analysis?

a.

Based on the number of policies sold

b.

Based on the premium income generated

c.

Directly allocated to investment expenses

d.

Based on the company's profits

Discuss
Answer: (c).Directly allocated to investment expenses Explanation:Investment costs are typically directly allocated to investment expenses in expense analysis.
Q69.
What is the purpose of comparing expense analysis results with previous investigations and industry statistics?

a.

To determine the salaries of employees

b.

To identify trends and potential problem areas

c.

To assess the profitability of the company

d.

To calculate the investment return

Discuss
Answer: (b).To identify trends and potential problem areas Explanation:Comparing expense analysis results with previous investigations and industry statistics helps identify trends and potential problem areas.
Q70.
What should be excluded from expense analysis?

a.

Computer costs

b.

Investment costs

c.

Exceptional items not likely to recur

d.

Property costs

Discuss
Answer: (c).Exceptional items not likely to recur Explanation:Exceptional items not likely to recur should be excluded from expense analysis.
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