Which of the following statements about the uninsured motorists coverage of the PAP is true? A) The coverage usually applies only to property damage. B) The coverage applies only if the uninsured motorist is legally liable. C) Unless higher amounts are purchased, the maximum benefit is normally limited to $1,000. D) A covered person’s only […]
A high debt ratio can be favorable because higher leverage may result in a higher return on equity. Indicate whether the statement is true or false ANSWER TRUE
Inventories are considered fixed assets because inventory levels remain fairly constant throughout the year. Indicate whether the statement is true or false ANSWER FALSE
Executive compensation in the United States A) is dominated by performance-based compensation designed to reduce agency problems. B) cannot be linked to stock prices as this would create a conflict of interest with existing shareholders. C) is well below levels in Europe and Asia. D) is dominated by performance-based compensation that ensures fair and just […]
Joyce was injured by an uninsured drunk driver while she was riding in a friend’s car. Joyce and her friend each have a PAP with an uninsured motorists limit of $50,000. How much will be paid by each policy if it is determined that Joyce has $70,000 of bodily injuries? A) Each policy will pay […]
Which of the following persons is (are) insured under the uninsured motorists coverage of the PAP? I. A pedestrian struck by a covered auto if he or she has no insurance to pay medical expenses II. The spouse of a named insured who is killed by an uninsured motorist A) I only B) II only […]
The risk-return trade-off that investors face on a day-to-day basis is based on realized rates of return because expected returns involve too much uncertainty. Indicate whether the statement is true or false ANSWER FALSE
The present value of a single future sum A) increases as the discount rate increases. B) depends upon the number of discount periods. C) is generally larger than the future sum. D) increases as the number of discount periods increases. ANSWER B
A common method of evaluating a firm’s financial ratios is to compare the current values of the firm’s ratios to its own ratios from prior periods. This is referred to as trend analysis. Indicate whether the statement is true or false ANSWER TRUE
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 […]
