Beta is a measurement of the relationship between a security’s returns and the general market’s returns. Indicate whether the statement is true or false ANSWER TRUE
Renee is risk manager of XYZ Company. She purchased a Commercial Package Policy for her company and added one optional coverage. This option suspends the coinsurance clause and substitutes a new agreement covering any loss in the same proportion that the limit of insurance purchased bears to a value specified in the declarations. This provision […]
The Sarbanes-Oxley Act, or SOX A) holds corporate advisors strictly accountable in a legal sense for any instances of misconduct. B) pretexts the interests of shareholders by providing greater protection against accounting fraud and financial misconduct. C) reduces the cost of financial reporting by standardizing reporting requirements. D) accomplishes both A and B. […]
There are a number of implied warranties in ocean marine insurance. One implied warranty is that the vessel is properly constructed and maintained, and that it is properly equipped for the voyage to be undertaken. This implied warranty is the warranty of A) seaworthiness. B) barratry. C) no deviation from planned course. D) legal purpose. […]
All of the following are considered to be instrumentalities of transportation and communication for purposes of inland marine insurance EXCEPT A) trains. B) tunnels. C) transmission lines. D) television towers. ANSWER Answer: A
Portfolio performance is determined mainly by stock selection and market timing, with less emphasis on asset allocation. Indicate whether the statement is true or false ANSWER FALSE
Which of the following is an advantage of the sole proprietorship? A) limited liability for its owners B) no significant legal requirements for starting the business C) double taxation for its owners D) easily transferred ownership ANSWER B
The Sarbanes-Oxley Act of 2002 holds all of the following groups strictly accountable in a legal sense for any instances of misconduct EXCEPT A) investors. B) outside members of the board of directors. C) company officers. D) lawyers. ANSWER A
Accounting supports financial managers by providing all of the following EXCEPT: A) identifying relevant data related to the activities of the firm. B) presenting data in an agreed-upon and standardized form known as generally accepted accounting practices. C) summarizing the firm’s economic activity in the form of financial statements. D) generating revenue for the firm. […]
XYZ Corporation has a P/E ratio of 20 and EFG Corporation has a P/E ratio of 10. It is likely that A) investors expect XYZ’s earnings to grow faster than EFG’s earnings. B) investors believe XYZ stock is overvalued. C) investors believe that for the same level of earnings growth, XYZ is a higher risk […]