Angie was injured when her car was struck by a driver who ran a red light. The other driver carried the minimum liability coverage necessary to be considered financially responsible. Angie’s injuries were $15,000 above the minimum bodily injury limit. There is a coverage that can be added to the PAP that applies when a […]
Financing activities have no impact on the income statement, but rather are reflected in changes in long-term debt and short-term debt on the balance sheet. Indicate whether the statement is true or false ANSWER FALSE
Accounting rules specify that assets on the balance sheet must be reported at current market value, because this is the valuation most useful to potential investors. Indicate whether the statement is true or false ANSWER FALSE
Prices of securities that are traded in the Over-the-Counter Markets are determined by A) the buyers of these securities. B) a continuous modified auction process. C) a “bid” and “ask” negotiation process of broker-dealers of these securities. D) the Federal Trade Commission. ANSWER C
Ratios that examine profit relative to investment are useful in evaluating the overall effectiveness of the firm’s management. Indicate whether the statement is true or false ANSWER TRUE
The recent financial crises was exacerbated by A) managers who underestimated the real risks of their decisions and borrowed excessively. B) extremely high interest rates in the United States that stifled investment. C) a lack of financial leverage that made U.S. firms less competitive in world markets. D) managers who overestimated risk and hence did […]
The purpose of the Miscellaneous-Type Vehicle Endorsement to the PAP is to A) add coverage for newly-acquired autos. B) provide coverage for when the insured is using someone else’s auto with the permission of the owner. C) insure motorcycles, mopeds, motor scooters, and similar vehicles. D) provide coverage for when the insured is using someone […]
Duties of an insured after a collision loss covered under the PAP include which of the following? I. Take reasonable steps to protect the vehicle from further damage. II. Admit fault if the insured believes he or she caused the collision. A) I only B) II only C) both I and II D) neither I […]
The present value of $1,000 to be received in 5 years is ________ if the discount rate is 12.78%. A) $368 B) $687 C) $494 D) $548 ANSWER D
All of the following statements about the termination provisions of the PAP are true EXCEPT A) The insured can cancel the policy for any reason. B) The insurer can cancel a newly-written policy if it has been in force for fewer than 60 days. C) The insurer can cancel the policy after it has been […]
