Investment firms, such as Goldman Sachs, assist the transfer of capital by A) facilitating indirect transfers from savers (investing public) to borrowers (corporations needing capital). B) selling common stock for corporate clients in the secondary market. C) selling indirect securities to savers and using the funds to buy common stock for corporations needing funds. D) […]
Capital budgeting is concerned with A) whether a company’s assets should be financed with debt or equity. B) managing a firm’s cash budgeting procedures. C) planning sales of a corporation’s equity capital. D) what long-term investments a firm should undertake. ANSWER D
Persons insured for personal liability under the homeowners policy include which of the following? I. Relatives while visiting the named insured. II. Overnight guests who are not relatives of the named insured. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: D
Historically, investments with the highest returns have the lowest standard deviations because investors do not like risk. Indicate whether the statement is true or false ANSWER FALSE
Which of the following statements about the coverage for medical payments to others (Coverage F) under the homeowners policy is true? A) Medical payments may be made for any resident of the named insured’s household. B) Medical expenses incurred within 3 years of an accident are covered. C) Medical payments are made only if the […]
HighLev Incorporated borrows heavily and uses the leverage to boost its return on equity to 30% this year, nearly 10% higher than the industry average. However, HighLev’s stock price decreases relative to its industry counterparts. How is this possible? A) The high levels of debt increased the riskiness of HighLev relative to its competitors. B) […]
Section II of the homeowners policy has exclusions applying to all of the following EXCEPT A) activities of the named insured’s minor children. B) business activities. C) transmission of a communicable disease. D) intentional injuries. ANSWER Answer: A
Which of the following accounts belongs on the asset side of a balance sheet? A) depreciation expense B) accruals C) inventory D) accounts payable ANSWER C
Which of the following situations is covered under Section II of an unendorsed homeowners policy? A) injuries which occur at a park resulting from a motorcycle owned by the insured B) injuries resulting from an auto not subject to registration because it is in dead storage C) injuries resulting from an auto rented by the […]
Small company stocks have historically had higher average annual returns than large company stocks, and also a higher risk premium. Indicate whether the statement is true or false ANSWER TRUE
