Ratio analysis enhances our understanding of three basic attributes of performance: liquidity, profitability, and the ability to create shareholder value. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following statements is true regarding unsatisfied judgment funds? A) An accident victim can choose to collect from the negligent driver or from the fund. B) The negligent driver is relieved of legal responsibility when the fund makes a payment to the accident victim. C) The maximum amount an individual can collect from […]
Date: September 19th, 2020
Profit maximization is NOT an adequate goal of the firm when making financial decisions because: A) it does not necessarily reflect shareholder wealth maximization. B) it ignores the risk inherent in different projects that will generate the profits. C) it can over-emphasize a project’s short-term returns. D) All of the above. ANSWER D
Date: September 19th, 2020
One benefit payable under a typical no-fault plan is “essential services expenses.” Which of the following would be covered under this benefit? A) funeral expenses B) housekeeping expenses C) hospital bills D) loss of income ANSWER Answer: B
Date: September 19th, 2020
“No pay, no play” laws have which of the following characteristics? A) Uninsured motorists are prevented from suing for noneconomic damages. B) Recovery by accident victims is limited to the amount of liability coverage that they have purchased. C) Driving privileges are automatically terminated if the vehicle operator is stopped by the police and does […]
Date: September 19th, 2020
The residual market for auto insurance is designed to provide insurance to A) superior risks who qualify for substantial discounts. B) owners of vintage/antique autos where the replacement cost far exceeds the actual cash value. C) drivers who are unable to obtain coverage in the standard market. D) businesses that need to insure a fleet […]
Date: September 19th, 2020
Operating return on assets captures the effect of taxes and financing costs, and hence provides the broadest possible measure of profitability. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
In Maryland, drivers who are unable to obtain auto insurance in the voluntary market are insured through a(n) A) state fund. B) reinsurance facility. C) joint underwriting association D) automobile insurance plan. ANSWER Answer: A
Date: September 19th, 2020
Janet was unable to obtain auto insurance in the voluntary insurance market. She was contacted by the state insurance department and notified that XYZ Insurance would be her insurer. The mechanism used in Janet’s state to provide auto insurance to high-risk drivers is a(n) A) automobile insurance plan. B) joint underwriting association. C) specialty automobile […]
Date: September 19th, 2020
The “perfect storm” of factors that contributed to the economic crisis of 2007 include A) agency costs, inefficient markets, and perfect capital markets. B) poorly chosen mortgage loans, falling housing prices, and a contracting economy. C) financial deregulation, unchecked commodity prices, floating currency exchange rates. D) increases in the minimum wage rate, unchecked illegal immigration, […]
Date: September 19th, 2020
