Which of the following relationships is true regarding the costs of issuing the following securities? A) common stock > preferred stock > bonds B) bonds > common stock > preferred stock C) common stock > bonds > preferred stock D) preferred stock > common stock > bonds ANSWER A
Which of the following statements about Dwelling Property 3 (special form) is (are) true? I. Personal property is covered only for those perils specifically named in the policy. II. The dwelling and other structures are covered on an “open perils” (all risks) basis. A) I only B) II only C) both I and II D) […]
The current ratio of a firm would be decreased by which of the following? A) Inventories are sold for cash. B) Land held for investment is sold for cash. C) Equipment is purchased, financed by a long-term debt issue. D) Inventories are sold on a long-term credit basis. ANSWER D
Which of the following statements regarding Section II coverage under the Homeowners 3 policy is true? A) Medical payments to others are covered regardless of whether the insured is legally liable. B) Legal defense costs incurred by the insurer to defend the insured reduce the per-occurrence limit of liability available. C) The insurer is not […]
Polly purchased a Homeowners 3 policy. She has a swing set in the backyard of her home. While her son and the neighbor’s child were using the swing set, it collapsed. Both of the children required medical care. Which of the following statements is true? A) The medical expenses Polly’s son are covered under the […]
Universal Financial, Inc. has total current assets of $1,200,000; long-term debt of $600,000; total current liabilities of $500,000; and long-term assets of $800,000. How much is the firm’s net working capital? A) $900,000 B) $600,000 C) $700,000 D) $1,000,000 ANSWER C
Which of the following is NOT a common characteristic of issuing long-term debt? A) Issuing long-term debt decreases uncertainty compared to a short-term fixed-rate issue. B) Issuing long-term debt provides more frequent financing opportunities. C) Long-term interest rates are typically HIGHER than short-term rates. D) Long-term debt may be preferred because short-term debt financing could […]
Which of the following statements about Coverage E: Personal Liability under the homeowners 3 policy is true? A) Losses attributable to personal injury are covered. B) The liability limit stated in the policy is an aggregate limit for the policy period. C) The insured must be legally liable for insurer to pay damages. D) Bodily […]
A pro forma balance sheet typically begins with liabilities and then we estimate the assets. Indicate whether the statement is true or false ANSWER FALSE
Which of the following statements about investment banking in the United States is MOST correct? A) The top five banks involved in investment banking account for less than 25% of the industry’s total market share. B) The investment banking industry became more competitive following the financial crisis in 2007 and 2008. C) Investing banking is […]