Stuck on a Practice Exam Question

[danieldyer707]

I am stuck on this practice exam question. I understand the question and I understand the answer, but I don't understand which choice is best for that answer. This involves the California State Life and Health. So here it goes.
Which of the following defines the term paid-in capital?
A. The greater of the value of the company’s assets in excess of its liabilities or the aggregate par value of its issued shares of stock

B. The value of company’s assets in excess of the sum of its liabilities for losses

C. The aggregate par value of the company’s issued shares of stock

D. The lower of the value of the company’s assets in excess of its liabilities or the aggregate par value of its issued shares of stock

Answer:
The term “pain-in capital” means the lesser of the following amounts: the value of the company’s assets in excess of its liabilities or the aggregate (combined total) par value of its issued shares of stock.

If you have any understanding in this, it would help out a lot. I googled it online, and it is even more confusing. Thank you.

 

[0b1kanobee]

IDK but I sorta guessed at it while avoiding the answer at the bottom and I got it right.

Here is a really good sight called Investopedia. When you can, you should make time to read Investopedia in your career. Pretty good site.

Paid In Capital Definition | Investopedia

 

[Cornelius]

Just make note of the question and the answer. You may not even see a question about PIC on the test.

If you notice A and D are similar. A has the word greater in it's answer and D has the word lessor..

Now just pick which one is closer to the answer..

 

[b61mack]

Don't get hung up on, trying to understand all the answers. file it in your mind, pass the test. 50% of the questions are dumb, and they will have no use, in the real world.

 

[danieldyer707]

I did pass the exax yesterday! There were no questions like this on the test. I passed with a score of 90%. I studied the material for about 2 months and then took my exam.

 

[Cornelius]

Congratulations. Welcome to the club.

 

[xrac]

The question you were wrestling with is an example of how useless these tests are from any practical world standpoint.

 

[danieldyer707]

Now that I passed my exam, how long do I have to wait for my license? On my paper from the exam site it says that I will receive an email confirmation from the California Department of Insurance, but I havn't yet; should I be worried?

 

[Cornelius]

Type in your name, last name first. : License Status - Name Search Probably a couple of weeks. You should be able to download it from the site. https://interactive.web.insurance.ca.gov/eLicense/index.jsp



Obtain Your License Online

 

[danieldyer707]

Thanks. I will keep checking.