Gary purchased a Personal Auto Policy (PAP) that included collision coverage. Gary lost control of his vehicle on an icy road.
He slid across the center line into oncoming traffic. Another vehicle hit his car, causing severe damage to it. Ignoring any deductible, what is the insurer's liability for damage to Gary's car?
A) the greater of the actual cash value or the amount necessary to repair or replace the vehicle
B) the replacement cost of the vehicle
C) the lesser of the actual cash value or the amount necessary to repair or replace the vehicle
D) the original purchase price of the vehicle
Question 2
Assume that an investment is forecasted to produce the following returns: a 30 probability of a
12 return; a 50 probability of a 16 return; and a 20 probability of a 19 return.
What is the
expected percentage return this investment will produce?
A) 9.5 B) 33.3 C) 16.1 D) 15.4
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