Investment A and Investment B both have the same expected return, but Investment A is more risky than Investment B. In the technical jargon of modern portfolio theory, Investment A is said to “dominate” Investment B. Indicate whether the statement is true or false ANSWER FALSE
Which of the following is NOT a cash-related activity of the financial manager? A) Operating B) Systems C) Financing D) Auditing ANSWER D
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: […]
Which of the following situations would be covered under Section II of a homeowners policy? I. The insured is sued by his girlfriend because he infected her with the AIDS virus. II. The insured’s son is sued after a friend suffered serious injury as a result of using illegal drugs sold to him by the […]
Which of the following statements about buying homeowners insurance is true? A) There is no reason to carry insurance for more than 80 percent of a dwelling’s replacement cost. B) The deduction for depreciation will be increased if a personal property replacement cost endorsement is purchased. C) Premiums often can be reduced substantially by selecting […]
Which of the following accounts does NOT belong on the asset side of a balance sheet? A) marketable securities B) accounts receivable C) cash D) common stock ANSWER D
Which of the following statements about the additional coverages included in Section II of the homeowners policy is true? A) Damage to property of others is covered only if the insured is legally liable. B) Damage to property arising out of a business engaged in by the insured is covered. C) Interest that accrues on […]
Offering discounts to accelerate the collection of accounts receivables in an example of which cash-related activity in the cash flow cycle? A) Operating activity B) Profitability activity C) Investing activity D) Financing activity ANSWER A
Liability arising out of which of the following is covered under the personal injury endorsement to the homeowners policy? A) bodily injury B) property damage C) slander D) professional liability ANSWER Answer: C