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
Date: September 19th, 2020
The present value of a deferred annuity (e.g., an annuity that starts 10 years from today) can be calculated in two steps: (1 ) calculate the future value of the annuity, and (2 ) calculate the present value of the amount determined in step (1 ). Indicate whether the statement is true or false […]
Date: September 19th, 2020
In constructing a pro forma balance sheet a manager can estimate the accounts receivable because: A) managers typically construct a pro forma income statement prior to the balance sheet. Thus, an estimate of sales has already been made and this is critical to estimating accounts receivable. B) if the firm has already made an estimate […]
Date: September 19th, 2020
Which of the following persons is (are) eligible for benefits under medical payments to others (Coverage F) of the homeowners policy? I. A friend who slips and falls on a wet patio while visiting the named insured II. A neighborhood child who is severely scratched by a cat in the care of the named insured […]
Date: September 19th, 2020
All of the following situations are excluded from coverage under Section II of the homeowners policy EXCEPT A) the rental of a spare bedroom which is used by the tenant as an office. B) the use of a rented airplane to take a vacation. C) the ownership of a ten-unit apartment house as an investment. […]
Date: September 19th, 2020
Nelson Industries has a higher debt ratio than Butler, Inc., and Nelson also has a higher times interest earned ratio than Butler. If Nelson and Butler both have the same amount of total assets, then A) Nelson may have more non-interest bearing liabilities, such as accounts payable, than Butler has. B) if both companies have […]
Date: September 19th, 2020
All of the following are considered insured locations for medical payments to others (Coverage F) under a homeowners policy EXCEPT A) a new vacation home purchased by an insured during the policy period. B) a motel room where an insured is temporarily residing. C) a hall rented by the insured for her daughter’s graduation party. […]
Date: September 19th, 2020
Which of the following statements about the personal liability coverage (Coverage E) of an unendorsed homeowners policy is true? A) Coverage is written on an accident basis. B) Coverage is provided for bodily injury liability. C) Coverage is provided for business and professional liability. D) Coverage is provided for personal injury liability. ANSWER […]
Date: September 19th, 2020
A corporation sells securities to an investment banking firm on January 1st. The next day an international oil crisis causes stock prices to drop dramatically. The corporation is immune from the drop in price of its stock due to which function of the investment banking firm? A) reinsurance B) underwriting C) hedging D) distributing […]
Date: September 19th, 2020
Determining the best way to raise money to fund a firm’s long-term investments is called A) the portfolio decision. B) the capital budgeting decision. C) the money flow processing decision. D) the capital structure decision. ANSWER D
Date: September 19th, 2020
