In which of the following cases will the agency problem between shareholders and managers be the greatest? A) The Johnson family owns 50% of the common stock of the company. The other 50% is owned by 5 mutual funds. B) 100% of the common stock is owned by the founder of the company who decided […]
Date: September 19th, 2020
Which of the following situations would be covered by the liability section of an unendorsed PAP if the insured is legally liable? A) The insured injures a pedestrian while operating a friend’s new motorcycle. B) The insured backs into and damages the garage door of his rented house. C) The insured intentionally runs into another […]
Date: September 19th, 2020
In which of the following situations would medical payments be paid under an unendorsed PAP? A) injuries incurred while riding a motorcycle B) injuries incurred while an auto is being used without the presumption that permission would have been granted to use the auto C) injuries incurred in an auto while it is used in […]
Date: September 19th, 2020
All of the following are insured persons under the liability coverage of the PAP EXCEPT A) a friend to whom the named insured loans a covered auto. B) the employer of the named insured for actions resulting from the named insured’s use of a covered auto. C) the former spouse of the named insured who […]
Date: September 19th, 2020
Operating return on assets (OROA) is equal to operating profit margin times fixed assets turnover. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
High Tech Corp. cut its research and development budget in 2010 by $4,000,000 in order to improve its cash flow for the year. Which of the following statements is MOST correct? A) The stock price will likely increase because the value of stock is based on reported cash flow. B) The change will have no […]
Date: September 19th, 2020
All of the following are covered autos under the liability section of the PAP EXCEPT A) a nonowned van which is driven by the insured on a regular basis. B) a trailer owned by the named insured. C) a borrowed auto used by the insured as a substitute for a stolen covered auto. D) a […]
Date: September 19th, 2020
If a company’s cash balance increases during the year, and the company also reports positive net income, then the company’s retained earnings balance must increase. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Larry has $25,000 of bodily injury liability coverage under his PAP. This limit is the minimum amount required by his state to be considered financially responsible. While on a vacation, Larry visited a neighboring state which has a minimum financial responsibility limit of $50,000 for bodily injury. Which of the following statements describes the situation […]
Date: September 19th, 2020
John occasionally borrows the car of his friend, Sophie. Sophie has a PAP with liability limits of 100/300/50. John also has a PAP, and his liability limits 250/500/50. John had an accident while using Sophie’s car and was found to be legally liable for $300,000 in bodily injury liability for injuries suffered by one person. […]
Date: September 19th, 2020
