You are going to pay $800 into an account at the beginning of each of 20 years. The account will then be left to compound for an additional 20 years until the end of year 40, when it will turn into a perpetuity. You will receive the first payment from the perpetuity at the end […]
Date: September 19th, 2020
Which of the following statements about International Financial Reporting Standards (IFRS) is NOT true? A) IFRS offers simplicity but also possibly more leeway for accounting malpractice than does GAAP. B) In 2008, the Securities and Exchange Commission (SEC) announced its plan to convert U.S. companies from GAAP to IFRS. C) IFRS sets out broad and […]
Date: September 19th, 2020
Gremlin Media Inc. has realized tremendous growth in recent years. Last year the firm realized an ROE of 41.16%. If the firm was in a 40% marginal tax bracket, had an asset turnover ratio of 2.1, a profit margin of 14%, and a leverage ratio of 2, what was the firm’s retention ratio? A) 0.70 […]
Date: September 19th, 2020
Jack, owner of Jack’s Bar and Grill, was robbed while attempting to deposit receipts at his bank’s night depository. Jack had purchased an ISO commercial crime coverage form. This loss would be covered under which insuring agreement? A) Inside the Premises—Theft of Money and Securities B) Outside the Premises C) Money Orders and Counterfeit Currency […]
Date: September 19th, 2020
In the context of a surety agreement, the party who agrees to answer for the debt, default, or obligation of another party is called the A) principal. B) obligee. C) surety. D) fidelity. ANSWER Answer: C
Date: September 19th, 2020
National Bank believed it had been properly authorized to transfer $250,000 to the off-shore account of one of its corporate customers. The authorization was fraudulent, however, and the transferred funds were stolen. Under which commercial crime coverage insuring agreement would such a loss be covered? A) Money Orders and Counterfeit Currency B) Forgery or Alteration […]
Date: September 19th, 2020
Optimal capital structure “first” criteria suggests that RISK should be ________ and that the best way to obtain that is with ________ levels of debt and ________ levels of equity. A) high; high; low B) low; high; low C) low; low; high D) high; low; high ANSWER C
Date: September 19th, 2020
Beta is a statistical measure of A) total risk. B) the standard deviation. C) unsystematic risk. D) the relationship between an investment’s returns and the market return. ANSWER D
Date: September 19th, 2020
In the context of a surety agreement, the party who agrees to perform certain acts or fulfill certain obligations is called the A) fidelity. B) obligee. C) surety. D) principal. ANSWER Answer: D
Date: September 19th, 2020
An armed robber pulled a gun on a teller at the Fourth National Bank. He made off with over $10,000 in cash. Which insuring agreement in a financial institution bond is designed to cover such losses? A) Insuring Agreement A—Fidelity B) Insuring Agreement B—On Premises C) Insuring Agreement C—In Transit D) Insuring Agreement D—Forgery or […]
Date: September 19th, 2020
