Stock A has the following returns for various states of the economy: State of the Economy Probability Stock A’s Return Recession 9% -72% Below Average 16% -15% Average 51% 16% Above Average 14% 35% Boom 10% 85% Stock A’s expected return is A) 13.8%. B) 9.9%. C) 12.7%. D) 16.5%. ANSWER C
Date: September 19th, 2020
Which of the following is considered to be a collision loss under Part D (coverage for damage to your auto) of the PAP? A) The covered auto was damaged when the car hit a deer. B) The covered auto is vandalized by a thief after it is stolen. C) The covered auto is damaged when […]
Date: September 19th, 2020
Capital market transactions include which of the following? A) common stock of a public corporation B) any security that is purchased from a brokerage firm that is well capitalized C) all securities that are purchased in the open market D) U.S. Treasury bills ANSWER A
Date: September 19th, 2020
Suppose a corporation can change its depreciation method so that its tax payments will decrease by $5,000 this year but increase by $5,000 next year. A) The change will have no impact on the value of the company because its cash flow over time will be the same. B) The change will increase the value […]
Date: September 19th, 2020
John has an auto which is covered for collision losses subject to a $250 deductible. Kate’s auto also has collision coverage but her deductible is $500. Which of the following statements describes how a $2,000 collision loss will be paid if it occurs when John borrows Kate’s car because his car is in the shop […]
Date: September 19th, 2020
Tony has an unendorsed Personal Auto Policy which provides medical payments coverage. Under which of the following circumstances would the injured person be eligible for benefits under Tony’s policy? I. A friend in the car is injured while Tony is driving a covered auto. II. A passenger on a motorcycle driven by Tony is injured […]
Date: September 19th, 2020
Finished goods held for sale are inventory, but raw materials to be used in the production process are considered other assets. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following statements about the medical payments coverage of the PAP is true? A) The amount of the benefit typically is $100,000. B) Covered expenses must be incurred within 30 days of the accident. C) Covered expenses include the cost of funeral services. D) The benefit limit applies on a per-accident basis rather […]
Date: September 19th, 2020
All of the following statements about Part D (coverage for damage to your auto) of the PAP are true EXCEPT A) Coverage may be purchased with or without collision insurance. B) Losses are paid regardless of fault. C) Coverage applies to a nonowned auto occasionally driven by an insured. D) No coverage is provided for […]
Date: September 19th, 2020
The realized rate of return, or holding period return, is equal to the holding period dollar gain divided by the price at the beginning of the period. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
