The current ratio of a firm would be increased by which of the following? A) Land held for investment is sold for cash. B) Inventories are sold for cash. C) Inventories are sold on a credit basis. D) Equipment is purchased, financed by a long-term debt issue. ANSWER A
Date: September 19th, 2020
The value of a bond investment, which provides fixed interest payments, will increase when discounted at an 8% rate rather than at an 11% rate. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following statements is (are) true concerning the home business insurance coverage endorsement? I. It increases the coverage on business personal property at the insured residence from $2,500 to the Coverage C limit. II. It excludes coverage for liability arising out of the home business. A) I only B) II only C) both […]
Date: September 19th, 2020
John purchased an unendorsed Homeowners 3 policy. The coverage will expire next month. Which of the following changes will lower the premium that John will pay? A) reducing the deductible B) adding a replacement cost endorsement for personal property C) switching to an HO-2 policy D) adding a personal injury endorsement ANSWER Answer: […]
Date: September 19th, 2020
The main duties of financial managers are: A) assessing the current business situation and future financing needs. B) developing long-term financing strategies. C) assessing future investments. D) All of the above. ANSWER D
Date: September 19th, 2020
Which of the following statements regarding Section II conditions under the homeowners policy is true? A) Other insurance is handled on a pro rata basis. B) Under no circumstances may the insured bring a lawsuit against the insurer. C) The liability limit is the same regardless of the number of persons injured in a covered […]
Date: September 19th, 2020
A credit-based score that is highly predictive of future claims cost is an individual’s A) CLUE score. B) insurance score. C) motor vehicle record score. D) underwriting score. ANSWER Answer: B
Date: September 19th, 2020
Which of the following statements is (are) true concerning the use of an individual’s credit history as an insurance rating factor? I. Individuals with poor credit histories, as a group, generally file fewer homeowners claims than do individuals with good credit histories. II. A poor credit history can be improved over time, allowing for the […]
Date: September 19th, 2020
Which of the following is NOT a common characteristic of issuing short-term debt? A) Issuing short-term debt increases uncertainty compared to a long-term fixed-rate issue. B) Issuing short-term debt provides more frequent financing opportunities. C) Short-term interest rates are typically HIGHER than long-term rates. D) Short-term debt financing could be problematic in the event of […]
Date: September 19th, 2020
Bill saves $3,000 per year in his IRA starting at age 25 and continuing to age 65, when he retires. The amount Bill has in his IRA at age 65 can be characterized as the future value of an annuity. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
