Jose and Maria would like “open-perils” coverage on their home and their personal property. Which unendorsed homeowners form provides this coverage? A) Homeowners 2 B) Homeowners 3 C) Homeowners 4 D) Homeowners 5 ANSWER Answer: D
Financing activities are concerned with: A) determining whether a company’s assets should be financed with debt or equity. B) managing a firm’s cash management procedures. C) managing a firm’s working capital. D) planning sales of a corporation’s equity capital. ANSWER A
Which of the following statements about covered perils and loss settlement under an unendorsed Homeowners 3 policy is true? A) The dwelling is covered on a named-perils basis. B) Personal property losses are settled on an actual cash value basis. C) Losses to the dwelling are always settled on an actual cash value basis. D) […]
Net working capital is equal to A) total assets minus total liabilities. B) total operating capital minus net income. C) current assets minus total liabilities. D) current assets minus current liabilities. ANSWER D
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 […]
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) […]
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
Michelle had four matching end tables in her home. A fire damaged the home, destroying two of the end tables. Michelle’s home was covered by an unendorsed Homeowners 3 policy. Which of the following is true with regard to the settlement for the end tables in this case? A) Loss to a pair or set […]
Dunweiler Inc, is developing a pro forma income statement for the coming year. The chief financial officer estimates that sales will be $150,000,000. If selling, general, and administrative expenses (SGA) are historically 18% of sales, what are the expected SGA expenses (in dollars)? A) $18,000,000 B) $27,000,000 C) $30,000,000 D) $41,000,000 ANSWER B […]
Jones, Inc. has a current ratio equal to 1.40. Which of the following transactions will increase the company’s current ratio? A) The company pays back $50,000 of its long-term debt. B) The company collects $500,000 of its accounts receivable. C) The company sells $1 million of inventory on credit. D) The company writes a $30,000 […]