As an example of a possible investment restriction, an insurer may only be allowed to invest up to 20 percent of its assets in common stock. What penalty is imposed upon the insurer that invests 30 percent of available assets in common stock? A. The additional 10 percent would be a nonadmitted asset. B. The additional 10 percent must be disposed of by year end. C. The additional 10 percent would only be listed at cost. D. The state regulators would impose a 10 percent fine on the insurer.
As an example of a possible investment restriction, an insurer may only be allowed to invest up to 20 percent of its assets in common stock. What penalty is imposed upon the insurer that invests 30 percent of available assets in common stock? A. The additional 10 percent would be a nonadmitted asset. B. The additional 10 percent must be disposed of by year end. C. The additional 10 percent would only be listed at cost. D. The state regulators would impose a 10 percent fine on the insurer.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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38. As an example of a possible investment restriction, an insurer may only be allowed to invest up to 20 percent of its assets in common stock. What penalty is imposed upon the insurer that invests 30 percent of available assets in common stock?
A. The additional 10 percent would be a nonadmitted asset.
B. The additional 10 percent must be disposed of by year end.
C. The additional 10 percent would only be listed at cost.
D. The state regulators would impose a 10 percent fine on the insurer.
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