New Click here to Enroll in NaBFID Analyst Intro Class on May 6

    Question

    A clause that allows the transfer of rights under a

    policy from one person to another, usually by means of a written document is called?
    A Assignment Correct Answer Incorrect Answer
    B Automatic Treaty Correct Answer Incorrect Answer
    C Arbitration Correct Answer Incorrect Answer
    D Appraisal Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    An assignment is the transfer of an individual's rights or property to another person or business. For example, when an option contract is assigned, the option writer has an obligation to complete the requirements of the contract. If the option was a call, the writer would have to sell the underlying security at the stated strike price. If it was a put, the writer would have to buy the underlying security at the stated strike price.

    Practice Next