Finance

John occasionally borrows the car of his friend, Sophie. Sophie has a

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. […]

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Date: September 19th, 2020

Insurance companies invest in the “long-end” of the securities market

Insurance companies invest in the “long-end” of the securities market by purchasing securities with longer maturities. In which of the following instruments would an insurance company be least likely to invest most of its assets? A) corporate stocks B) mortgages C) corporate bonds D) commercial paper     ANSWER D

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Date: September 19th, 2020

The CEO of High Tech International decides to change an accounting met

The CEO of High Tech International decides to change an accounting method at the end of the current year. The change results in reported profits increasing by 5%, but the company’s cash flows are not changed. If capital markets are efficient, then A) the stock price will increase only if the accounting change will also […]

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Date: September 19th, 2020