Multiple choice general knowledge

Investment income ratio is calculated by dividing net investment income by:

  1. Written premium

  2. Earned premium

  3. Unearned Premium

  4. Total investment income

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Investment income ratio measures investment efficiency relative to premium earned during the period. It uses earned premium (B) because this represents revenue recognized for coverage provided, matching the timing of investment income. Written premium (A) is policy sales regardless of period, unearned premium (C) is deferred revenue, and total investment income (D) would make the ratio meaningless.