Ben lives in a state that has a no-fault auto insurance law. Another motorist failed to yield the right of way, and hit his car. Ben filed a claim with his own insurer. He also contacted a lawyer to discuss suing the other driver. The lawyer told Ben that while lawsuits resulting from auto accidents […]
Date: September 19th, 2020
Your parents are complaining about the price of items today compared to what they cost years ago. If an automobile that cost $12,000 in 1980 costs $40,000 in 2010, calculate the annual growth rate in the automobile’s price. What will be an ideal response? ANSWER 4.26%, based on PV = $12,000; FV = […]
Date: September 19th, 2020
Which of the following equations represents a simple and effective way to think about anticipated external funding? A) External funds required = assets – liabilities – equity B) External funds required = assets + liabilities – equity C) External funds required = assets + liabilities + equity D) External funds required = assets – liabilities […]
Date: September 19th, 2020
Which of the following statements about the Homeowners 6 (unit-owners form) policy is true? A) It includes personal liability coverage. B) It covers personal property on an open-perils basis. C) It covers the dwelling on an open-perils basis. D) It is designed for tenants who rent an apartment or a home. ANSWER Answer: […]
Date: September 19th, 2020
Which of the following transactions will increase a corporation’s operating return on assets? A) sell 10-year bonds and use the money to pay off current liabilities B) negotiate a new contract that lowers raw material costs by 10% C) sell stock and use the money to pay off some long-term debt D) increase sales by […]
Date: September 19th, 2020
Assume that you have $330,000 invested in a stock that is returning 11.50%, $170,000 invested in a stock that is returning 22.75%, and $470,000 invested in a stock that is returning 10.25%. What is the expected return of your portfolio? A) 12.9% B) 14.8% C) 18.3% D) 15.6% ANSWER A
Date: September 19th, 2020
A bond maturing in 10 years pays $80 each year (including year 10 ) and $1,000 upon maturity. Assuming 10 percent to be the appropriate discount rate, the present value of the bond is A) $1,000.00. B) $877.11. C) $416.39. D) $1,785.67. ANSWER B
Date: September 19th, 2020
A financial manager is considering two projects, A and B; both are expected to add $5 million to profits. Project A is expected to add $5 million to profits this year, while Project B is expected to add $1 million to profits each year over the next five years. Which of the following statements is […]
Date: September 19th, 2020
Based on the information in Table 3-1, calculate the amount of dividends paid by Jones Company in 2010 (no assets were disposed of during the year, and there was no change in interest payable or taxes payable). A) $4,000 B) $2,000 C) $3,500 D) $2,500 ANSWER B
Date: September 19th, 2020
A group of investment bankers organized to distribute large securities issues is known as a syndicate. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
