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[#46] Assets can be valued by –

(A) Book value

(B) Market value

(C) Discounted present value

(D) Either of the above

Correct Answer

(D) Either of the above

Explanation

Solution: Assets can be valued by Book value, Market value or Discounted present value.

[#47] The surplus in an insurance company is a function of –

(A) How Asset is valued

(B) How liability is valued

(C) How Assets & Liabilities are valued

(D) None of the above

Correct Answer

Explanation

Solution: The surplus in an insurance company is a function of how Assets & Liabilities are valued. Surplus is also known as net worth or the difference between the market value of assets and the present value of the liabilities and their relationship.

[#48] If Liabilities are liberally valued it would result in –

(A) More surplus

(B) Less surplus

(C) More or less surplus

(D) None of the above

Correct Answer

(A) More surplus

Explanation

Solution: If Liabilities are liberally valued it would result in more surplus.

[#49] If Liabilities are undervalued it would result in –

(A) More surplus

(B) Less surplus

(C) More or less surplus

(D) Neither more nor less surplus

Correct Answer

(A) More surplus

Explanation

Solution: If Liabilities are undervalued it would result in more surplus.

[#50] Which of the following are correct?

Correct Answer

(D) All of the above
(G) Both the above are wrong
(L) All of the above

Explanation

Solution: All the three are correct. Prospecting is building a list of persons who can be approached for life insurance. Marketing includes an exercise to meet the account holders of a bank. Meeting known and familiar people who can give an agent interview for life insurance purposes is useful.