Profit maximization does not adequately describe the goal of the firm because: A) profit maximization does not require the consideration of risk. B) profit maximization often has a short-term focus. C) maximization of dividend payout ratio is a better description of the goal of the firm. D) Both A and B ANSWER D
Date: September 19th, 2020
Due to strict stock market controls, the most a stock’s value can drop in one trading day is 5%. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following statements about shopping for auto insurance is true? A) Adequate physical damage insurance on your auto is the most important consideration. B) Consideration should be given to dropping liability coverage if you drive an older car with a low market value. C) To obtain the lowest premium, an applicant should review […]
Date: September 19th, 2020
You plan to go to Asia to visit friends in three years. The trip is expected to cost a total of $10,000 at that time. Your parents have deposited $5,000 for you in a Certificate of Deposit paying 6% interest annually, maturing three years from now. Uncle Lee has agreed to pay for all remaining […]
Date: September 19th, 2020
Bill was severely injured by an uninsured driver. Bill did not purchase uninsured motorists coverage, and the other driver, although held liable, could not pay the damages awarded. After exhausting other sources of recovery, Bill learned that his state is one of a few states that has a special fund to compensate innocent accident victims. […]
Date: September 19th, 2020
A state law that requires individuals who have been involved in an auto accident or who have been convicted for certain vehicle-related offenses to demonstrate the ability to pay liability claims up to a specified dollar amount is called a(n) A) financial responsibility law. B) compulsory insurance law. C) unsatisfied judgment fund law. D) “no […]
Date: September 19th, 2020
How much money must be put into a bank account yielding 6.42% (compounded annually) in order to have $1,671 at the end of 11 years (round to nearest $1)? A) $798 B) $921 C) $886 D) $843 ANSWER D
Date: September 19th, 2020
Which of the following statements about joint underwriting associations for insuring high-risk drivers is (are) true? I. Underwriting losses are proportionately shared by all auto insurers based on premiums written in the state. II. Each company participating in a joint underwriting association sets it own rates. A) I only B) II only C) both I […]
Date: September 19th, 2020
Which of the following statements about unsatisfied judgment funds is (are) true? I. An accident victim must obtain a judgment against the motorist who caused an accident and must show the judgment cannot be collected. II. The major disadvantage is that the negligent uninsured motorist is relieved of legal liability. A) I only B) II […]
Date: September 19th, 2020
Under which type of automobile insurance arrangement are all automobile insurers in a state assigned their proportionate share of high-risk drivers based on the total volume of automobile business written in the state? A) automobile insurance plan B) unsatisfied judgment fund C) reinsurance facility D) specialty automobile plan ANSWER Answer: A
Date: September 19th, 2020
