Bay Gallery owns a building on Wharf Street. Bay Gallery purchased a Commercial General Liability Policy with no endorsements. All of the following claims would be covered under the policy EXCEPT A) An artist sued the gallery for slander after an employee of the gallery said the artist’s work looks like it was painted by […]
Which of the following categories of owners have unlimited liability? A) sole proprietors B) general partners in a limited partnership C) shareholders of a corporation D) both A and B ANSWER D
Over time, there has been a high correlation between actual rates of return on securities and the securities’ standard deviations of returns. Indicate whether the statement is true or false ANSWER TRUE
Within the financial markets, explain what we mean by “private placements” and name the advantages and disadvantages. What will be an ideal response? ANSWER Private placements are an alternative to the sale of securities to the public or to a restricted group of investors through a privileged subscription. Any type of security can […]
Equity provides more financial flexibility for a firm than debt. Indicate whether the statement is true or false ANSWER TRUE
The ________ measure a firm’s performance over a specified period of time whereas a ________ provides a snapshot of the firm as of a specific date. A) income and balance sheets; cash flow statement B) balance sheet and cash flow statement; income statement C) income and cash flow statements; balance sheet D) None of the […]
Liability arising out of work performed by independent contractors is referred to as A) contractual liability. B) contingent liability. C) care, custody, and control liability. D) customer’s liability. ANSWER Answer: B
A favorable income variance indicates a monthly income A) equal to the budgeted monthly income. B) greater than budgeted monthly expenses. C) greater than budgeted monthly income. D) greater than accumulated income variances. ANSWER C
Examples of uses of cash include A) selling machinery. B) paying cash dividends to stockholders. C) borrowing an additional amount using a secured loan. D) all of the above ANSWER B
Because risk is measured by variability of returns, how long we hold our investments does not matter very much when it comes to reducing risk. Indicate whether the statement is true or false ANSWER FALSE
