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
What are a firm’s two principal sources of financing? Of what do these sources consist? What will be an ideal response? ANSWER The total assets represent the resources owned by the firm, and total liabilities and total shareholders’ equity indicate how those resources were financed. Debt is money that has been borrowed and […]
Date: September 19th, 2020
Steve and Mary are art collectors. They own lithographs, etchings, and vintage photographs valued at over $250,000. Steve and Mary display their art collection at their home. They can insure this valuable personal property through a A) title insurance policy. B) dwelling property form. C) personal articles floater form. D) personal umbrella policy. […]
Date: September 19th, 2020
A stock with a beta of 1.4 has 40% more variability in returns than the average stock. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following would be most likely to align the interests of managers and shareholders? A) Fixed but high salaries B) Large bonuses C) Stock options D) None of the above ANSWER C
Date: September 19th, 2020
Prepare a balance sheet using the information given below. Make sure to identify current assets, net fixed assets, total assets, current liabilities, long-term debt, total equity, and total liabilities and equity. Gross fixed assets $40,000 Cash $18,000 Other assets $5,000 Accumulated depreciation $30,000 Common stock $43,000 Short-term notes payable $12,000 Accounts payable $35,000 Inventories $122,000 […]
Date: September 19th, 2020
Paul has a personal auto policy with a per-person liability limit of $300,000. He also has a personal umbrella policy with a limit of $2,000,000 and a self-insured retention of $1,000. How much will be paid by each policy if a person wins a judgment of $500,000 against Paul as a result of bodily injury […]
Date: September 19th, 2020
An alternative method of projecting a firm’s future financial needs (such as bank loans ) involves creation of a pro forma cash budget. Would you consider a cash budget to be more appropriate for short-term or long-term projections? Why? How do monthly cash budgets aid in the development of an annual cash budget? Is a […]
Date: September 19th, 2020
Based on the information in Table 4-1, the average collection period is A) 29.85 days. B) 36.50 days. C) 46.34 days. D) 32.85 days. ANSWER D
Date: September 19th, 2020
Commercial banks that also provide investment banking services are called A) conglomerate banks. B) investment enhanced banks. C) multi-purpose banks. D) universal banks. ANSWER D
Date: September 19th, 2020
