Month: July 2020

The Kenney rule is a ratio of an insurance company’s unearned premiums to its policyholders’ surplus that is said to reduce insolvency risk.

Total utility is the aggregate summation of satisfaction or fulfillment that a consumer receives through the consumption of goods or services.

The term intrapreneurship refers to a system that allows an employee to act like an entrepreneur within a company or other organization. Intrapreneurs are self-motivated, proactive, and action-oriented people who take the initiative to pursue an innovative product or service. An intrapreneur knows failure does not have a personal cost as it does for an entrepreneur since the organization absorbs losses that arise from failure.

Uninsurable risk is a condition that poses an unknowable or unacceptable risk of loss or a situation in which the insurance would be against the law. Insurance companies limit their losses by not taking on certain risks that are very likely to result in a loss. Many states offer insurance for otherwise uninsurable risks through their high-risk pools. However, lifetime benefits may be capped and premiums may be expensive.

Ricardian equivalence is an economic theory that argues that attempts to stimulate an economy by increasing debt-financed government spending are doomed to failure because demand remains unchanged. The theory argues that consumers will save any money they receive in order to pay for the future tax increases they expect to be levied in order to pay off the debt.

An exchange rate mechanism (ERM) is a device used to manage a country’s currency exchange rate relative to other currencies. It is part of an economy’s monetary policy and is put to use by central banks.

Uninsurable risk is a condition that poses an unknowable or unacceptable risk of loss or a situation in which the insurance would be against the law. Insurance companies limit their losses by not taking on certain risks that are very likely to result in a loss. Many states offer insurance for otherwise uninsurable risks through their high-risk pools. However, lifetime benefits may be capped and premiums may be expensive.

Ricardian equivalence is an economic theory that argues that attempts to stimulate an economy by increasing debt-financed government spending are doomed to failure because demand remains unchanged. The theory argues that consumers will save any money they receive in order to pay for the future tax increases they expect to be levied in order to pay off the debt.

An exchange rate mechanism (ERM) is a device used to manage a country’s currency exchange rate relative to other currencies. It is part of an economy’s monetary policy and is put to use by central banks.

The dividend irrelevance theory is the theory that investors do not need to concern themselves with a company’s dividend policy since they have the option to sell a portion of their portfolio of equities if they want cash.