Tom and Nancy Boyle were surprised to learn that some of their valuable personal property—a gun collection, jewelry, a mink coat, and sterling silverware—was subject to internal limits under their homeowners policy. What separate insurance policy can the Boyles purchase to obtain the desired coverage on this personal property? A) personal umbrella policy B) dwelling […]
Which of the following choices would NOT be considered a cash outflow? A) operational expenses B) anticipated sales C) selling, general, and administrative expenses D) capital expenditures ANSWER B
In order to be conservative, accrual accounting requires that expenses be recorded when incurred, but revenues are recorded only after the cash has been received. Indicate whether the statement is true or false ANSWER FALSE
All of the following are characteristics of inland marine floater policies EXCEPT A) Coverage can be specifically tailored to the specific type of personal property insured. B) Coverage applies only when the property is at a specified location, such as the insured’s home. C) The amount of insurance can be selected by the purchaser. D) […]
Based on the information in Table 4-1, assuming that no preferred dividends were paid, the return on common equity is A) 55.15%. B) 17.56%. C) 38.83%. D) 44.86%. ANSWER A
Under the ISO program, a mobile home can be insured by A) adding the appropriate endorsement to the ISO personal auto insurance policy. B) using an ISO floater policy. C) adding the appropriate endorsement to an ISO Homeowner 2 or Homeowners 3 form. D) using an ISO inland marine form. ANSWER Answer: C
Private placements are A) available for both debt and equity securities, but the market is dominated by equity issues. B) limited to equity securities. C) especially appealing to new, small, and medium-sized companies. D) limited to debt securities. ANSWER C
________ and operating risk are one in the same and are reflected in the projected variability of the earnings of the firm regardless of how the firm is financed. A) Business risk B) Financial risk C) Exchange rate risk D) Risk of equity ANSWER A
Company unique risk can be virtually eliminated with a portfolio consisting of approximately 20 securities. Indicate whether the statement is true or false ANSWER TRUE
A limited partnership provides limited liability to A) only to limited partners who do not participate in the management of the business. B) all partners. C) only limited partners responsible for day to day management of the firm. D) all general partners. ANSWER A
