The Homeowners 3 policy limits the amount of coverage provided on certain personal property (e.g. coin collections and silverware). This personal property can be adequately insured by A) lowering the deductible which applies to personal property losses. B) storing the property away from the home at another location. C) adding a schedule to the policy […]
Which of the following losses to a dwelling would be covered under an unendorsed Homeowners 3 policy? A) smoke damage resulting from agricultural operations of a neighboring farmer B) damage to the structure caused by a flash flood C) damage to the structure caused by the weight of heavy snow on the roof D) damage […]
The bid price is the price that a dealer will pay for a security; the asked price is the price at which she will sell a security. Indicate whether the statement is true or false ANSWER TRUE
The chief financial officer (CFO) is responsible for overseeing financial planning, corporate strategic planning, and controlling the firm’s cash flow. Indicate whether the statement is true or false ANSWER TRUE
The cash flow cycle: A) describes the flow of cash through a company. B) illustrates that profits and cash flows are the same. C) reminds a financial manager that profits are important. D) focuses on financing activities only. ANSWER A
If the future value of annuity A is greater than the future value of annuity B, then the present value of annuity A must also be greater than the present value of annuity B. Indicate whether the statement is true or false ANSWER TRUE
Determining how a firm should raise money to fund its long-term investments is referred to as capital structure decisions. Indicate whether the statement is true or false ANSWER TRUE
All of the following are equity accounts on a balance sheet EXCEPT A) retained earnings. B) paid-in capital. C) cash. D) common stock. ANSWER C
Baker Corp is required by a debt agreement to maintain a current ratio of at least 2.5, and Baker’s current ratio now is 3. Baker wants to purchase additional inventory for its upcoming Christmas season, and will pay for the inventory with short-term debt. How much inventory can Baker purchase without violating its debt agreement […]
Which of the following statements about the replacement cost provision of the Homeowners 3 policy is true? A) It applies to personal property losses only. B) Except for small losses, the insured must repair or replace the damaged property in order to receive full replacement cost. C) The insured is required to carry an amount […]
