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Question 6: The following information was presented on one of the financial statements prepared by the
Rouge health plan as of December 31, 1998:
When calculating its cash-to-claims payable ratio, Rouge would correctly divide its:
A. Cash by its reported claims only
B. Cash by its reported claims and its incurred but not reported claims (IBNR)
C. Reported claims by its cash
D. Reported claims and its incurred but not reported claims (IBNR) by its cash
Correct Answer: B
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