Variation in the rate of return of an investment is a measure of the riskiness of that investment. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Criticisms of compulsory insurance laws include which of the following? I. They provide less than complete protection since they require only a minimum amount of liability insurance. II. Even with compulsory insurance laws, a substantial number of motorists continue to operate vehicles without insurance. A) I only B) II only C) both I and II […]
Date: September 19th, 2020
Economic value added includes a charge for the cost of equity that is not included on financial statements prepared according to GAAP. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Defects of financial responsibility laws include which of the following? I. Accident victims may not be fully compensated for their injuries. II. They apply only to property damage losses, not to bodily injury claims. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: A
Date: September 19th, 2020
Under financial responsibility laws, proof of financial responsibility is generally required under which of the following circumstances? A) The use of an auto by any driver with fewer than 3 years of driving experience B) When an individual renews his or her driver’s license C) Failure to pay a final judgment resulting from an auto […]
Date: September 19th, 2020
The primary goal of a publicly owned firm is: A) maximize profits. B) minimize shareholder risk. C) value creation. D) maximize revenues. ANSWER C Explanation: C) to maximize shareholder’s wealth
Date: September 19th, 2020
Assume that you went to Las Vegas and hit the jackpot for $5 million. Further assume that you were offered a choice to receive the $5 million today, or receive it in two years. According to one of the principles of finance, which would you take? A) the $5 million today because it would be […]
Date: September 19th, 2020
Assume that an investor is offered a choice of a risk-free government bond that is expected to return 3.5% or a high-risk corporate stock. According to one of the principles of finance, what would induce the investor to purchase the corporate stock? A) a return that is substantially higher than 3.5% B) cash dividends C) […]
Date: September 19th, 2020
The difference between the price the corporation gets and the public offering price is called the broker-dealer spread. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following statements is true with respect to a pure no-fault auto insurance plan? A) Under such a plan, you would collect from your own insurer and retain the right to sue the other party if your injuries surpass a dollar or verbal threshold. B) Most no-fault plans that have been adopted by […]
Date: September 19th, 2020
