When developing a pro forma balance sheet which of the following is typically the LAST item to be estimated? A) inventory B) total assets C) external financing D) cash ANSWER C
Date: September 19th, 2020
If a corporation wants a guarantee that all of its shares of stock will be sold, it should use which of the following distribution methods? A) privileged subscription with no standby agreement B) competitive bid purchase C) direct sale D) commission or best-efforts contract ANSWER B
Date: September 19th, 2020
Your friend, John, believes that since capital markets are efficient, he doesn’t need to read the financial press or be involved in stock research before purchasing stocks for his portfolio. He simply throws darts at the stock pages and buys the stocks the darts hit. Is stock research and analysis important when buying and selling […]
Date: September 19th, 2020
________ refers to the ease with which a firm is able to tap-in to sources of capital. A) Shareholder control B) Financial flexibility C) Risk and timing D) Impact and cost ANSWER B
Date: September 19th, 2020
Benkart Corporation has sales of $5,000,000, net income of $800,000, total assets of $2,000,000, and 100,000 shares of common stock outstanding. If Benkart’s P/E ratio is 12, what is the company’s current stock price? A) $360 per share B) $240 per share C) $96 per share D) $60 per share ANSWER C
Date: September 19th, 2020
Which of the following statements about the additional coverage for damage to property of others in Section II of the homeowners policy is true? A) The maximum amount of coverage is $25,000 per occurrence. B) Payments are made on the basis of the replacement cost of the damaged property. C) There is coverage for property […]
Date: September 19th, 2020
Which of the following statements about endorsements to the homeowners policy is (are) true? I. The purpose of the inflation guard endorsement is to help prevent home owners from being under-insured. II. The purpose of the watercraft endorsement is to provide coverage for watercraft when they are used outside the United States. A) I only […]
Date: September 19th, 2020
Which of the following statements regarding watercraft liability under Section II of an unendorsed HO-3 policy is (are) true? I. No coverage is available for watercraft liability. II. Liability arising out of the use of watercraft that are under certain length and horsepower limits is covered. A) I only B) II only C) both I […]
Date: September 19th, 2020
Which of the following statements concerning Economic Value Added (EVA) is MOST correct? A) Higher operating return on assets will result in lower EVA for a company with a debt ratio over 50%. B) A company with positive net income will have positive EVA. C) The higher the cost of capital, the higher the EVA, […]
Date: September 19th, 2020
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
Date: September 19th, 2020
