Jenny purchased a Personal Auto Policy (PAP) that included property damage liability, collision coverage, medical payments coverage, and other-than-collision coverage. Jenny had too much alcohol to drink at a graduation party. While driving home from the party, Jenny ran off the road and hit a tree. Police responded to the accident, and Jenny was arrested […]
Which statement concerning towing and labor coverage under the PAP is (are) true? I. There’s no coverage for towing if the auto breaks down—towing is only covered if the auto needs to be towed after a collision has occurred. II. Towing and labor coverage pays for repairs at a service station or garage. A) I […]
Gary purchased a Personal Auto Policy (PAP) that included collision coverage. Gary lost control of his vehicle on an icy road. He slid across the center line into oncoming traffic. Another vehicle hit his car, causing severe damage to it. Ignoring any deductible, what is the insurer’s liability for damage to Gary’s car? A) the […]
One weakness of the times interest earned ratio is that it includes only the annual interest expense as a finance expense and ignores other financing items such as lease payments that must be paid. Indicate whether the statement is true or false ANSWER TRUE
Consider the after-tax cash flows for Project S and Project L: Project S Project L Year 1 $3000 0 Year 2 0 $3000 A rational person would prefer ________. A) Project L because they can avoid taxes by receiving cash flows later B) Project S because the money can be reinvested sooner C) information about […]
Explain the difference between (a) public offerings and private placements, (b) primary markets and secondary markets, (c) the money market and the capital market, and (d) organized security exchanges and over-the-counter markets. What will be an ideal response? ANSWER In a public offering, securities are usually made available to the public at large […]
Kelly was hit by a car while she was walking to the park. She incurred $750 in medical costs at a hospital emergency room. Kelly has coverage for this charge under which of her Personal Auto Policy (PAP) coverages? A) bodily injury liability B) other-than collision C) medical payments D) collision ANSWER Answer: […]
The appraisal provision in the Personal Auto Policy is used to determine the A) value of a loss payable under property damage liability. B) amount paid for a physical damage loss to the insured’s auto if the insured and insurer disagree. C) amount of auto insurance that should be purchased for an older/antique car. D) […]
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 […]
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
