Final answer:
The operating ratio, given the combined ratio of 103% and an investment profit ratio of 2%, is calculated to be 101%. The options provided in the question don't match this result, suggesting either a potential typo in the question or a misunderstanding of how ratios are being applied.
Step-by-step explanation:
The student has asked to identify the operating ratio given a combined ratio of 103%, an investment profit ratio of 2%, and an expense ratio of 30%. The operating ratio is calculated by subtracting the investment income ratio from the combined ratio. The combined ratio includes both the loss ratio and the expense ratio. Here's the calculation:
Operating ratio = Combined ratio - Investment income ratio
= 103% - 2%
= 101%
However, please note that the listed options do not include 101%, which could imply the question contains a typo or a misunderstanding. Typically, if the expense ratio is already included in the combined ratio, it shouldn't be deducted again. If, in practice, the combined ratio already accounts for the expense ratio, the correct calculation would exclude the expense ratio as follows:
Operating ratio (excluding additional expense ratio consideration) = Combined ratio - Investment income ratio
= 103% - 2%
= 101%
The options provided (71%, 73%, 75%, 78%) don't match the calculated result of 101%, so further clarification may be needed from the source of the question.