A 65 year-old man is retiring and can take either $500,000 in cash or an ordinary annuity that promises to pay him $50,000 per year for as long as he lives. Which of the following statements is MOST correct? A) The higher the interest rate, the more likely the man will prefer the $500,000 lump […]
Date: September 19th, 2020
The building and personal property coverage form provides several optional coverages. Under one optional coverage, no deduction is taken for depreciation when settling a covered loss. This optional coverage is called A) extra expense. B) agreed value. C) replacement cost. D) inflation guard. ANSWER Answer: C
Date: September 19th, 2020
Which of the following statements about the provisions of the building and personal property coverage form is (are) true? I. A separate deductible must be satisfied for each building damaged in the same occurrence. II. Under the replacement cost option, there is no deduction for depreciation. A) I only B) II only C) both I […]
Date: September 19th, 2020
Which of the following statements about the extra expense coverage form is (are) true? I. It provides coverage for the increased cost that must be paid to continue operations during a period of restoration. II. It provides coverage for lost business income if a key customer or key supplier experiences a loss. A) I only […]
Date: September 19th, 2020
Based on the information in Table 4-1, the total asset turnover ratio is A) 1.41. B) 1.11. C) 2.33. D) 4.45. ANSWER B
Date: September 19th, 2020
Juanita has the following three ratios: 1. debt service coverage = 2.5, 2. debt ratio = 0.5, and 3 . liquidity ratio = 0.8. We can say that Juanita has A) poor solvency and poor liquidity. B) strong solvency and strong liquidity. C) strong liquidity but poor solvency. D) strong solvency but poor liquidity. […]
Date: September 19th, 2020
You can buy a $50 savings bond today for $25 and redeem the bond in 10 years for its full face value of $50. You could also put your money in a money-market account that pays 7% interest per year. Which option is better, assuming they are of equal risk? A) The money-market account is […]
Date: September 19th, 2020
Unique security risk can be eliminated from an investor’s portfolio through diversification. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following types of forms is used to insure fluctuations in business personal property, such as inventory and finished goods? A) accounts receivable coverage form B) a value reporting form C) difference in conditions insurance D) business income insurance ANSWER Answer: B
Date: September 19th, 2020
A cash budget is often more valuable as a SHORT-term rather than a LONG-TERM financial forecasting vehicle. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
