Economic Value Added attempts to measure a firm’s economic profit rather than its accounting profit. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The creation of value is driven by what factors? A) Cash flow and growth B) Growth and risk C) Profitability and growth D) Reducing risk ANSWER B Explanation: B) The primary goal of a firm is value creation, and that the creation of value is driven by two key factors: growth and risk.
Date: September 19th, 2020
After the Personal Auto Policy has been in force for 60 days (or is a renewal policy), all of the following are grounds for the insurer to cancel the policy EXCEPT A) nonpayment of premiums B) the insured’s license to drive is suspended C) the insurer discovers material misrepresentation by the insured in the application […]
Date: September 19th, 2020
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
Dan picked up his friend Rodney to drive to their softball game. Both Dan and Rodney have a Personal Auto Policy (PAP) with $5,000 of medical payments coverage. Dan hit a parked car, and Rodney was injured, incurring $9,000 of medical expenses. How will this claim be settled under the other insurance provision of the […]
Date: September 19th, 2020
An income statement reports the firm’s revenues and expenses for a specific period of time such as one year. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Name the benefits derived from the existence of stock exchanges. What will be an ideal response? ANSWER Providing a continuous market: it may be the most important function of an organized security exchange. A continuous market provides a series of continuous security prices. Establishing and publicizing fair security prices: An organized exchange permits […]
Date: September 19th, 2020
DuPont analysis indicates that the return on equity may be boosted above the return on assets by using leverage (debt). Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Owen’s car is insured under a Personal Auto Policy (PAP). A hail storm occurred one evening, and his car was severely damaged. Which PAP coverage, if Owen purchased it, would cover this damage to his auto? A) property damage liability B) uninsured motorists property damage C) collision D) other-than-collision ANSWER Answer: D
Date: September 19th, 2020
