The goal of most financial managers is to reduce the amount of long-term debt to zero, thus maximizing shareholder wealth. Indicate whether the statement is true or false ANSWER FALSE
Which of the following is NOT true regarding mortgaged-backed securities (MBS)? A) The MBS process allows the mortgage bank or other financial institution that made the original mortgage loan to get its money back out of the loan and lend it to someone else. B) Securitization provides liquidity to the mortgage market and makes it […]
Net working capital is equal to gross working capital minus depreciation. Indicate whether the statement is true or false ANSWER FALSE
A balance sheet reflects the current market value of a firm’s assets and liabilities. Indicate whether the statement is true or false ANSWER FALSE
The multi-car discount is based on the assumption that A) two cars owned by the same person will not be driven as frequently as one car. B) multiple vehicle owners are safer drivers. C) owners of more than one vehicle are more likely to be financially responsible. D) lower liability limits are needed if there […]
A number of benefits are payable under no-fault plans. Under one provision, benefits are paid for tasks normally performed by the insured, including such things as lawn care, housework, and home repairs. These tasks are called A) home health care services. B) hospice services. C) activities of daily living. D) essential services expenses. […]
The balance sheet reflects the accounting equation: Assets = Liabilities + Owners’ Equity. Indicate whether the statement is true or false ANSWER TRUE
Alan has been involved in three accidents and has been ticketed for a number of driving violations. He tried to purchase auto insurance, but three insurers refused to sell him coverage. The generic name for state plans designed to insure drivers like Alan is the A) exchange market. B) residual market. C) voluntary market. D) […]
A few states have enacted laws to make minimum amounts of liability insurance available at reduced rates to individuals who cannot afford regular insurance or who have limited financial assets to protect. The coverage made available through such a plan is called A) probationary insurance. B) uninsured motorists insurance. C) no-fault auto insurance. D) low-cost […]
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