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Question 1

Pension plans that an Employer establishes for retired or disabled employees, regardless of whether an employee contributes, are known as:

ADefined benefit plans

BGuaranteed Pension benefits

CPre-Pension Schemes

DNone of the above

Correct answer: A

Question 2

You are auditing the claim handing of your branch office. You note that one of the claims is for lost revenue due to a windstorm damaging the building. The claim file states that the insured requested coverage for this type of loss. However, the independent agent failed to request the coverage though an oversight. Which action is required to appropriately handle the claim?

AThe claim should be denied since coverage was never present, and the claim should be placed against the agency's errors and omissions policy for reimbursement of the claimant.

BThe claim should be accepted and paid up to the policy limits since the insured meant to create coverage for business interruption. Due premiums for the coverage can be charged retrospectively

CThe claim should be denied since repaying for business interruption and lost revenues would financially enrich the insured, which is against one of the principle of insurance D. The claim should be paid and the insured indemnified since the insured requested the
coverage. Since the produce was acting as an ''agent'' of the carrier, they commute their liability

Correct answer: A

Question 3

Which of the following is not a characteristic of a control environment?

AManagement communicates the importance of internal controls to all employees

BEmployees have a vague idea of their responsibilities; so they work in a flexible environment

CEmployees are held accountable for their performance

DA system is in place to monitor controls on a regular basis

Correct answer: B

Question 4

Shareholders also have the right to receive declared dividends. Besides the potential for capital appreciation, investors also have the potential to receive dividend income. There are several types of dividends. For instance, an investor with 500 shares of stock selling at $50 per share would have 1,000 shares at $25 per share after a 2-for-1 split. These types of dividends are called:

ACash dividends

BStock split

CPreferred dividends

DNone of these

Correct answer: D

Question 5

Most certificates are held by the depository trust company as custodians for the trustee for the benefit of the certificate holders, and the notice of book entry is made to the certificate holders simultaneously with the distribution. The actual certificates, but instead only possess a record of ___________.

AWhere they are?

BWhat they have?

CWhen they purchased?

DAll of these

Correct answer: A

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