The following two items are from Marcia White’s “Dining Out” expense category: 1. January monthly variance = $25 (favorable); 2. February cumulative variance = -$10 (unfavorable). If Marcia budgeted $85 a month for this activity, we know that she A) spent $60 in January and $95 in February. B) spent $60 in January and $120 […]
Which of the following is covered under the liability coverage of a businessowners policy? A) damage to the insured’s property B) bodily injury liability C) automobile liability D) professional liability ANSWER Answer: B
Which of the following statements is (are) true concerning the self-insured retention (SIR) under a commercial umbrella liability policy? I. The SIR applies to claims covered by the umbrella policy but not by any underlying insurance. II. The SIR only applies to those claims for which the underlying policy has paid first, and the umbrella […]
Which of the following organizational forms accounts for the greatest number of firms? A) “S” Corporation B) Limited partnership C) Sole proprietorship D) “C” corporation ANSWER C
The nominal interest rate is 7% and the expected inflation rate is 2%. Based on the Fisher effect, the real rate of interest is A) 6.86%. B) 5.0%. C) 4.9%. D) 5.1%. ANSWER C
The auto dealers coverage form pays for damages that the insured is legally obligated to pay because of damage to a customer’s auto left in the insured’s car while it is being serviced or repaired. This coverage is called A) garagekeepers coverage. B) general liability coverage. C) other-than-collision loss coverage. D) acts, errors or omissions […]
Based on the information in Table 3-2, what is Enigma’s cash flow from operations? A) $75,000 B) $105,000 C) $85,000 D) $100,000 ANSWER A
All of the following statements about aviation insurance are true EXCEPT A) Physical damage coverage can be written on an “all-risks” basis. B) Liability coverage also applies to bodily injury arising out of the premises where the aircraft is stored. C) Liability coverage applies to liability arising out of a workers compensation law. D) Aviation […]
Based on the information in Table 4-3, the operating return on total assets is A) 33.33%. B) 10.06%. C) 44.74%. D) 55.62%. ANSWER A
All of the following statements about liability coverage under the businessowners policy are true EXCEPT A) Liability arising out of personal and advertising injury is covered as part of the insuring agreement. B) Medical payments coverage is provided. C) Employees acting within the scope of their employment are excluded from coverage. D) Coverage is included […]
