With total assets of 5 million and total liabilities of 3 million, what is the insurer's equity?

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Multiple Choice

With total assets of 5 million and total liabilities of 3 million, what is the insurer's equity?

Equity represents the net worth, found by subtracting liabilities from assets. With 5 million in assets and 3 million in liabilities, equity = 5,000,000 − 3,000,000 = 2,000,000. This 2 million is the insurer’s remaining ownership value after debts are covered. The other numbers wouldn’t reflect the difference between assets and liabilities, so they don’t fit.

Equity represents the net worth, found by subtracting liabilities from assets. With 5 million in assets and 3 million in liabilities, equity = 5,000,000 − 3,000,000 = 2,000,000. This 2 million is the insurer’s remaining ownership value after debts are covered. The other numbers wouldn’t reflect the difference between assets and liabilities, so they don’t fit.

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