All of the following statements about yacht insurance are true EXCEPT A) Property damage coverage includes damage from insects, weathering, and wear and tear. B) Liability coverage includes the cost of raising, removing, or destroying a sunken or wrecked yacht. C) Coverage can be added for maritime workers covered by the United States Longshoremen and […]
In relation to the balance sheet, an income statement shows A) net worth, not the period’s savings or dissavings. B) the period’s savings or dissavings, not net worth. C) activities at a point in time, not over a period of time. D) financial position, not financial performance. ANSWER B
A corporation has annual sales of $18 million, total assets of $4 million, a debt ratio of 40%, depreciation expense of $200,000, and a tax rate of 40%. The corporation’s total stockholders’ equity is equal to A) $2,800,000. B) $2,400,000. C) $1,800,000. D) $5,600,000. ANSWER B
All of the following statements about the boatowners package policy are true EXCEPT A) Physical damage coverage for the boat is usually written to cover all losses except those losses specifically excluded. B) Liability coverage is provided for bodily injury only. C) Some policies provide optional uninsured boaters coverage. D) Medical payments coverage for water-skiers […]
Proper diversification generally results in the elimination of risk. Indicate whether the statement is true or false ANSWER FALSE
Reasons why an insured might add a scheduled personal property endorsement to a homeowners policy include which of the following? I. To lower the premium by limiting the perils covered II. To obtain higher limits for certain personal property A) I only B) II only C) both I and II D) neither I nor II […]
A personal income statement shows A) a detailed breakdown of cash income and expenses over a past period of time. B) a comparison of income and expenses at a point in time. C) your contribution to savings for the year by following strict accounting rules for determining net income. D) all revenue, expense, asset, liability, […]
Your personal balance sheet provides A) an estimate of your net worth at a point in time. B) an illustration of how your wealth has changed over time. C) a summary estimate of your expenses and income over the previous year. D) a pro forma budget for the coming year. ANSWER A
Its ability to raise capital by selling stock makes the corporation the best form of organization in terms of raising capital. Indicate whether the statement is true or false ANSWER TRUE
When an investment banking firm “underwrites” an issue of securities, the firm is performing which of the following? A) offering to purchase the securities from the firm, thereby assuming the risk of resale to investors B) agreeing to provide insurance that the firm’s securities will sell for a price that is established by the firm […]
