Which of the following changes would not lead to an increase in a security’s required return? An increase in A) the market risk premium. B) risk-free rate. C) the security’s beta. D) the security’s random risk. ANSWER D
Date: September 19th, 2020
When the initial premium pays for the sales commission on the life insurance policy, this is known as “direct recognition.” Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Modified whole life attempts to meet the life cycle needs of the family. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Having a positive market value added (MVA) would suggest that a firm has been investing in negative net present value projects. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A retired spouse can qualify for benefits based upon his or her earnings record or the spouse’s earnings record. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
You should insure your property for more than its replacement cost. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
You have just read the annual report of a mutual fund. It boasted of a 26% return and advertised that it had beat the market return last year by three percentage points. In doing some research you discover the fund had a beta of +1.5 and the return on risk-free Treasury securities was 15.0%. Assuming […]
Date: September 19th, 2020
Social Security benefits contain cost of living adjustments. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
In 2012 Advantage Cable Inc. had $250,000 in invested capital, a WACC of 9.35%, EBIT of $75,000, and a tax rate of 30%. With this information please estimate the economic value added (EVA) for the firm. A) $29,125 B) $23,375 C) $52,500 D) There is not enough information to answer this question. ANSWER […]
Date: September 19th, 2020
The Social Security system provides for reduced benefits at an early retirement age. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
