n NISM Certifications
NSM General NISM
Medium

Why is it necessary to provide for a margin of profit in insurance?

Practice question from IC 38 Mock Test 16 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    To cover the cost of administration

  2. To provide a return on the capital invested in the business

    Correct answer

  3. C

    To provide for unexpected heavy losses

  4. D

    To pay for the cost of procurement of business (agency commission)

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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