Which of the following statements about surety bonds is (are) true? I. The surety has a legal right to recover a loss payment it made on behalf of a defaulting principal. II. The obligee is the party who benefits from the bond if the principal fails to perform. A) I only B) II only C) […]
Date: September 19th, 2020
If you hold a portfolio made up of the following stocks: Investment Value Beta Stock X $4,000 1.5 Stock Y $5,000 1.0 Stock Z $1,000 .5 What is the beta of the portfolio? A) 1.24 B) 1.33 C) 1.00 D) 1.15 ANSWER D
Date: September 19th, 2020
A retirement plan guarantees to pay you or your estate a fixed amount for 25 years. At the time of retirement you will have $100,000 to your credit in the plan. The plan anticipates earning 7% interest annually over the period you receive benefits. How much will your annual benefits be assuming the first payment […]
Date: September 19th, 2020
Other things equal, a higher leverage ratio implies: A) a higher ROA. B) lower financial risk for shareholders. C) greater financial risk for shareholders. D) a lower ROE. ANSWER C
Date: September 19th, 2020
The limited liability company (LLC) form of business organization is: A) able to retain limited liability for its owners. B) a cross between a partnership and a corporation. C) it is taxed like a partnership. D) All of the above. ANSWER D
Date: September 19th, 2020
Which of the following statements is (are) true with respect to the differences between insurance and surety bonds? I. Insurance is a two-party contract; surety involves three parties. II. Insurers usually do not have the right to recover a loss payment from an insured, while a surety does have the legal right to recoup a […]
Date: September 19th, 2020
In addition to the information contained in Table 4-4, you know that the current ratio for 2010 is 4 and that the corporation paid $11,600 in dividends in 2010. What is Wes Donnell’s cash balance for 2010? A) $6,500 B) $2,500 C) $4,000 D) $13,600 ANSWER C
Date: September 19th, 2020
Appliance World sells small appliances. The store purchased an ISO crime coverage policy. Last night, someone used a crowbar to pry open a locked door, leaving marks of forced entry. The thief took a number of appliances. The crime that occurred in this case is called A) burglary. B) shoplifting. C) larceny. D) robbery. […]
Date: September 19th, 2020
Due to unstable world markets, most large U.S. corporations do almost all of their business in the United States. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Explain why large and growing firms tend to choose the corporate form. What will be an ideal response? ANSWER The advantages of the corporation begin to dominate as the firm grows and needs access to the capital markets to raise funds. Because of the limited liability, the ease of transferring ownership through the […]
Date: September 19th, 2020
