Asset allocation is not recommended by financial planners because mixing different types of assets, such as stocks with bonds, makes it more difficult to track performance and adjust portfolios to changing market conditions. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
William would like to insure his home. He does not want theft or personal liability coverage; however, he would like “open perils” (all-risks) coverage on the dwelling. William should purchase a A) Homeowners 3 Policy. B) Dwelling Property 1 Form. C) Dwelling Property 2 Form. D) Dwelling Property 3 Form. ANSWER Answer: D
Date: September 19th, 2020
The corporation is a legal entity separate from its owners; thus it is possible for the corporation to continue even upon the death of one or more shareholders. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
All of the following are commonly excluded by personal umbrella policies EXCEPT A) acts committed with the intent to cause bodily injury or property damage. B) professional liability. C) aircraft liability. D) libel, slander, and other types of personal injury. ANSWER Answer: D
Date: September 19th, 2020
Given the information in Figure 12.1, what is the break-even EBIT-EPS for Crane Manufacturing Inc.? A) EBIT = $100,000 and EPS = $0.15 B) EBIT = $250,000 and EPS = $0.35 C) EBIT = $350,000 and EPS = $0.45 D) EBIT = $400,000 and EPS = $0.65 ANSWER B Explanation: B) (EBIT-0)(1-t)/n = […]
Date: September 19th, 2020
The owners of a corporation enjoy limited liability. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
You have the choice of two equally risk annuities, each paying $5,000 per year for 8 years. One is an annuity due and the other is an ordinary annuity. If you are going to be receiving the annuity payments, which annuity would you choose to maximize your wealth? A) the annuity due B) the ordinary […]
Date: September 19th, 2020
A corporate financial manager who is trying to create value for its shareholders: A) is not concerned with ethics but rather with writing iron-clad contracts. B) can safely ignore ethics as long as no laws are broken. C) must behave ethically to stay out of jail. D) is concerned with ethics because unethical behavior destroys […]
Date: September 19th, 2020
Rob’s income was $20,000 in 2005 and $22,000 in 2006. If inflation was 6% in 2006, then we can say that Rob’s 2006 income A) simply matched the inflation rate. B) fell behind the inflation rate. C) exceeded the inflation rate by 4%. D) lagged the inflation rate by 2%. ANSWER C
Date: September 19th, 2020
Which of the following statements concerning FAIR plans is (are) true? I. All property is eligible for coverage regardless of physical condition. II. Losses and expenses are shared by insurers who participate in a plan. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: […]
Date: September 19th, 2020
