Assume that you expect to hold a $20,000 investment for one year. It is forecasted to have a year end value of $21,000 with a 30% probability; a year end value of $24,000 with a 45% probability; and a year end value of $30,000 with a 25% probability. What is the standard deviation of the […]
Date: September 19th, 2020
Darla purchased an unendorsed Homeowners 3 policy. While the policy was in force, a fire occurred that destroyed a living room set. The living room set cost $4,000 new, but was 25 percent depreciated when the loss occurred. Replacement furniture will cost $4,400. Assuming no deductible, how much will Darla receive from her insurer? A) […]
Date: September 19th, 2020
Which of the following is an additional coverage provided under Section I of the Homeowners 3 policy? A) medical payments to others B) debris removal C) personal liability D) intentional property damage caused by an insured ANSWER Answer: B
Date: September 19th, 2020
A dwelling with a replacement cost of $150,000 was insured under a Homeowners 3 policy for $100,000 at the time the roof was destroyed by a windstorm. The actual cash value of the loss was $9,000, but it will cost $12,000 to replace the roof. Ignoring any deductible, what will the insurer pay to settle […]
Date: September 19th, 2020
For a retailer with inventory to sell, the acid-test ratio will be A) less than the current ratio, thus providing a more stringent measure of liquidity. B) unimportant because it doesn’t include inventory. C) greater than the current ratio, thus providing a more stringent measure of liquidity. D) greater than the current ratio, thus providing […]
Date: September 19th, 2020
You must add one of two investments to an already well- diversified portfolio. Security A Security B Expected Return = 14% Expected Return = 14% Standard Deviation of Standard Deviation of Returns = 15.8% Returns = 19.7% Beta = 1.8 Beta = 1.5 If you are a risk-averse investor, which one is the better choice? […]
Date: September 19th, 2020
Preferred stock is traded in the money market, while common stock is traded in the capital market. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Ellen believes the value of the loss to her home is $30,000. The insurer has offered $18,000 to settle the loss. If Ellen and the insurer cannot agree on the value of the loss, which homeowners policy provision specifies how this dispute will be settled? A) insurer’s option B) appraisal clause C) loss payment clause […]
Date: September 19th, 2020
A corporate treasurer is typically responsible for each of the following duties EXCEPT A) cost accounting. B) capital expenditures. C) credit management. D) cash management. ANSWER A
Date: September 19th, 2020
Linda wants to purchase a homeowners policy. She has some valuable personal property to which internal policy limits apply. Her agent said that she could obtain coverage under her homeowners policy by attaching a list of this valuable property with specific amounts of insurance. Such a listing is called a(n) A) binder. B) schedule. C) […]
Date: September 19th, 2020
