300 Level Department of Insurance exam questions and detailed answers. Download the answers in document format. Correct, detailed, and straightforward answers.
Questions:
a) Dotun paid a premium of #1,000,000 to Consolidated Hallmark Insurance PLC which was used to buy shares of Unilever PLC by the insurer at a rate of #2 per share. The shares were eventually sold for #1,500,000. Dotun decided to cash-in on the policy and Consolidated Hallmark Insurance PLC offered a price of #1.75 for each unit. You are required to:
(i) determine the units of shares bought by Consolidated Hallmark Insurance PLC.
(ii) calculate how much will be paid to Dotun as claim under the policy
(iii) determine the bid-offer gap
b) Highlight the advantages of a unit-linked policy over conventional investment outlets.
