Which of the following statements about the personal property replacement cost endorsement used with the homeowners policy is (are) true? I. The damaged or destroyed property must be repaired or replaced, no matter the size of the loss. II. It is designed primarily for antiques and fine art. A) I only B) II only C) […]
A firm whose debt to equity ratio ________ the industry average will ________ future financing flexibility by financing with equity at the next opportunity but doing so may sacrifice earnings per share. A) is less than; maximize B) exceeds; minimize C) exceeds, maximize D) None of the above. ANSWER C
Which of the following losses would be covered under Section II of an unendorsed Homeowners 3 policy? A) The homeowner accidentally dropped a bowling ball, injuring another bowler’s foot. B) The homeowner’s nanny was injured on her day off while hiking at a state park. C) The insured slandered a city council member at a […]
Tom is planning to build a home. He is weighing many factors, including construction materials, location, and other considerations. Which of the following statements is true with regard to homeowners insurance and Tom’s new home? A) The higher the construction costs are in the area, the lower Tom’s homeowners insurance premiums will be. B) The […]
What are the duties of a treasurer? Of a controller? What will be an ideal response? ANSWER The treasurer generally handles the firm’s financial activities, including cash and credit management, making capital expenditure decisions, raising funds, financial planning, and managing any foreign currency received by the firm. The controller is responsible for managing […]
To generate cash to invest in fixed assets, a firm can issue equity or obtain a loan from a bank. This is an example of which cash-related activity in cash flow management? A) Operating activity B) Profitability activity C) Investing activity D) Financing activity ANSWER D
To evaluate or compare investment proposals, we must adjust the value of all cash flows to a common date. Indicate whether the statement is true or false ANSWER TRUE
The acid-test ratio of a firm would be unaffected by which of the following? A) Inventories are sold on a short-term credit basis. B) Common stock is sold and the money is invested in marketable securities. C) Inventories are sold for cash. D) Accounts payable are reduced by obtaining a short-term loan. ANSWER […]
All of the following are exclusions in the homeowners policy that apply to medical payments to others (Coverage F) EXCEPT A) bodily injury resulting from nuclear radiation. B) bodily injury to persons who are social guests at the insured location. C) bodily injury to persons eligible to receive workers compensation benefits. D) bodily injury to […]
Which of the following statements about an earthquake endorsement for a homeowners policy is (are) true? I. The endorsement also covers landslides and volcanic eruptions. II. The coverage for earthquakes is written without a deductible. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: […]
