Que. 1 : Q1) If : Exposure Units = 84,653
Claim Count = 885, and
Scale Factor = 1,000;
Then : Which of the following format is correct to find out Frequency per ‘k’
Exposure Units?
1. a) 1,000*(885) /84,653
2. b) 1,000*(885) *84,653
3. c) 1,000*(885) +84,653
4. d) 1,000*(885) -84,653
Que. 2 : Q2) Which of the following statements is correct?
1. a) A risk neutral decision maker would have a utility function that is exponential.
2. b) A risk averse decision maker would have a utility function that decreased at a progressively lower rates or had a positive second derivative.
3. c) A decision maker who favoured risk would have a utility function that increased at a progressively faster rate or had a positive second derivative.
4. d) All the above statements are correct.
Que. 3 : Q3) Which risks exists when there is a chance of loss but no chance of gain?
1. a) Objective risk
2. b) Speculative risk
3. c) Subjective risk
4. d) Pure risk
Que. 4 : Q4) A homeowner has the risk of losing all or part of his home, but no chance of gain, if a fire occurs is an example of which risk?
1. a) Subjective risk
2. b) Speculative risk
3. c) Pure risk
4. d) Objective risk
Que. 5 : Q5) What do the following are generally reviewed as the actuary’s primary responsibilities in rate-making?
1. a) Affordability of coverage
2. b) Desired level of profit
3. c) what the competition is charging
4. d) All of the above
