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
The computation of return on equity, or ROE, does not include retained earnings as part of common equity because retained earnings includes all net income for the company since its inception and analysts are trying to calculate the return for just the current year. Indicate whether the statement is true or false ANSWER […]
Date: September 19th, 2020
When the corporation sells securities directly to the investment public without involving an investment banker, it is called a privileged subscription. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
All of the following are major rating factors for determining private passenger automobile insurance premiums EXCEPT A) gender. B) age. C) race. D) marital status. ANSWER Answer: C
Date: September 19th, 2020
The term used to describe plans in which automobile insurers participate to make insurance available to drivers unable to obtain coverage in the standard market is the A) foreign market. B) fair market. C) residual (shared) market. D) high-premium market. ANSWER Answer: C
Date: September 19th, 2020
The creation of value: A) implies that one firm will gain at the expense of others. B) provides benefits to society as scarce resources are directed to their most productive use. C) is not a practical goal since it cannot be measured effectively. D) is achieved only if cash flows exceed accounting profits. […]
Date: September 19th, 2020
Economic value added is calculated by taking (net income less the cost of all capital) times total assets. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Biff deposited $9,000 in a bank account, and 10 years later he closes out the account, which is worth $18,000. What annual rate of interest has he earned over the 10 years? A) 7.18% B) 6.45% C) 10.0% D) 9.10% ANSWER A
Date: September 19th, 2020
