1. According to the EC consumer behavior model, personal characteristics and environmental characteristics are classified as:
- independent variables.
- dependent variables.
- intervening variables.
- decision variables.
2. The major environmental variables influencing EC purchasing are:
- price, brand, frequency of purchase, and tangibility.
- social, cultural, community, regulatory, political, and legal.
- age, gender, ethnicity, education, and lifestyle.
- price, social, cultural, ethnicity, and lifestyle.
3. Banner advertising on Web sites helps trigger a realization that there is a gap between reality and a desired state, which occurs in the __________ stage of the EC purchase decision-making process.
- need identification
- information search
- evaluation, negotiation, and selection
- purchase, payment, and delivery
4. The unearned premium reserve:
- usually increases when premium volume of an insurer is decreasing.
- is a special group of assets reserved for catastrophe losses.
- consists primarily of cash and liquid near-cash investments.
- is a deferred income account carried on the balance sheet as a liability.
- none of the above.
5. Basically, a retrospectively rated insurance program is a:
- form of class rating.
- variation of schedule rating.
- cost-plus arrangement in which actual losses determine the final premium.
- a variation of experience rating, since past losses determine the current premium.
- none of the above.
6. Major differences between statutory accounting and Generally Accepted Accounting Principles (GAAP) include:
- the concept of non admitted assets.
- the way that the insurer's invested assets are valued.
- the matching of expenses and revenues.
- the degree of conservatism.
- all of the above.
7. What are the half-year and mid-quarter conventions?
8. What if a salary is deemed unreasonable by the IRS what happens then?
9. If an agent tells an insured that a breach of a policy condition will not affect the coverage, and a loss occurs, the insurer may:
- deny coverage if the breach contributed to the loss.
- be liable for the loss because the agent's acts are considered acts of the insurer.
- deny liability if the agent was not authorized to make such statements.
- deny liability because a waiver must be in writing before it is valid.
- none of the above.
10. Because of the fact that the terms of an insurance contract are fixed by the insurer instead of being determined by a bargaining process, the insurance policy is said to be:
- a contract of utmost good faith.
- an aleatory contract.
- a contract of indemnity.
- a unilateral contract.
- a contract of adhesion.
11. Major differences between statutory accounting and Generally Accepted Accounting Principles (GAAP) include:
- the concept of nonadmitted assets.
- the way that the insurer's invested assets are valued.
- the matching of expenses and revenues.
- the degree of conservatism.
- all of the above.
12. In general, what has been the impact of the introduction of EC on customer loyalty?
- Loyalty has increased because of targeted relationship marketing.
- Loyalty has decreased because of customers' ability to shop, compare, and shift vendors.
- There has been little change in loyalty because the impacts have cancelled each other out.
- It is not known whether loyalty has increased or decreased.
13. By increasing customer loyalty, EC companies can achieve each of the following benefits EXCEPT:
- lower marketing and advertising costs.
- lower warranty claims costs.
- lower resistance to competitors.
- lower transaction costs.
14. Procter & Gamble (P&G) used the Internet in the new product development of Whitestrips, a teeth-brightening product. Based on this experience, P&G:
- decided to add Internet research to its traditional marketing test model.
- learned that the cost of online surveys were about the same as similarly sized telephone surveys, but online surveys expedited research considerably.
- could not determine the target market segments for the Whitestrips.
- reduced the time-to-market from concept to market launch by approximately two years.