[amp_mcq option1=”Discounted future value” option2=”Discounted present value” option3=”Market value” option4=”Book value” correct=”option2″]
The correct answer is Book value.
Book value is the value of an asset as recorded on a company’s balance sheet. It is calculated by taking the original cost of the asset and subtracting any accumulated depreciation. Book value is not necessarily the same as market value, which is the price at which an asset could be sold.
In the context of insurance companies, book value is the value of the assets that the company owns, such as cash, investments, and property. Book value is used to calculate the company’s net worth, which is the difference between its assets and liabilities.
The other options are incorrect because:
- Discounted future value is the value of an asset in the future, taking into account the time value of money.
- Discounted present value is the value of an asset today, taking into account the time value of money.
- Market value is the price at which an asset could be sold in the open market.