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19 Apr 2019

Which one of the following general statements about surplus lines insurance is true?

Select one:

a. State guaranty funds do not cover the policyholders of surplus lines insurers

b. Surplus lines insurers are subject to state form and rate filing regulations

c. All non-admitted insurers are surplus lines insurers

d. Admitted insurance companies must write insurance in the surplus lines market

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Beverley Smith
Beverley SmithLv2
21 Apr 2019

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Statements a., b., and c. are all correct. 44.A nonendowment contribution made to a not-for-profit healthcare organization that the donor specifies is to be used only for the provision of charity care would most likely be classified as: Unrestricted Temporarily restricted Forever restricted Board designated A liability 45.Which of the following statements about the balance sheet is most correct? The balance sheet provides information about the financial position of an organization as of a moment in time. The balance sheet provides detailed information about the assets, liabilities, equity, revenues, and expenses of an organization. The balance sheet is affected by changes in the net income of the organization. Statements a. and c. are both correct. Statements a., b., and c. are all correct. 47. 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True or False Costs that remain constant on a per unit basis but that increase in total as volume increases over a relevant range are referred to as semi-fixed costs. 65.Which of the following statements about the step-down method of cost allocation is most correct? The step-down method requires that overhead departments be ranked by the amount of services they provide to one another. The step-down method does not allocate costs from each overhead department to every other overhead department. The step-down method is less complex than the reciprocal method. The step-down method is more complex than the direct method. All of these statements are correct. 67. True or False: The classification of costs as direct or indirect depends on the unit (i.e., organization or department) of analysis. 68. True or False: When conducting a cost allocation, costs of a single support department should never be separated into multiple cost pools. 69. True or False: When the cost driver is changed, support department cost allocations to revenue-generating departments will change under the step-down method of cost allocation but not under the direct method of cost allocation.

13. In the currency markets, $1 = 0.75 British pound and 1 Euro = $1.25. Wolverine Cola produces cherry cola in England at a cost of 0.9 British pound per unit. The product is sold in France for 1.5 euros. In terms of U.S. dollars, how much profit is Wolverine realizing on each unit sold?

a. $0.37 b. $0.675 c. $0.875 d. $1.04

14. Which of the following statements is FALSE?

a. Any bond sold outside the country of the borrower is called an international bond.

b. Foreign bonds and Eurobonds are two important types of international bonds.

c. Foreign bonds are bonds sold by a domestic borrower but denominated in a different currency than the country in which the issue is sold.

d. The term Eurobond applies to any bonds that are denominated in a currency that differs from the country in which the issue is sold.

15. The US has a _________________ because we buy more foreign goods than foreigners buy of our goods.

  1. Capital Account Surplus
  2. Current Account Deficit
  3. Current Account Surplus
  4. Capital Account Deficit

16. The current spot price of the S&P is $1200. If the risk free rate is 5% and if owning the S&P would result in $20 of dividend income, then what should the futures price be?

a) $1200 b) $1225 c) $1240 d) $1280

17. ____________ involve two companies exchanging fixed-rate debt for floating-rate debt.

  1. Convertible Debt
  2. Currency Swap
  3. Stock Swap
  4. Interest Rate Swap

18. Which of the following statements about Futures contracts is FALSE?

a) Traded on an organized exchange

b) Profits and losses are marked to market

c) Actual delivery almost always occurs

d) All of the above are true

19. There are call options on the common stock of XYZ Corporation. Which of the following best describes the factors that affect call option values?

a. The price of the call options will rise if XYZ

1. Which of the following statements about the OTC market istrue?

A. An OTC market is an organized exchange where there is acentral trading location.

B.

OTC security transactions are made on the floor of an exchangeby traders.

C.

Securities that are not listed on an organized exchange arebought and sold on the OTC market.

D.

Securities that are listed on an organized exchange are boughtand sold in the OTC market.

2. Which of the following theories states that security pricesreflect all information, whether public or private?

A. Weak-form efficiency.

B.

Semistrong-form efficiency.

C.

Nominal-form efficiency.

D.

Strong-form efficiency.

3. Which of the following is a primary investment vehicle forthe funds in which life insurance companies must invest?

A.Both equity securities and long-term corporate bonds.

B.

CDs.

C.

Equity securities.

D.

Long-term corporate bonds.

4. Large firms are most likely to use money markets for thefollowing reason:

A. To make long term investments.

B.

To buy commercial paper at lower interest rates than it couldsell through a bank.

C.

To finance long term investments.

D.

To adjust their liquidity position.

5. Which of the following is true of the New York StockExchange?

A. It is an organized exchange.

B.

It has no central trading location.

C.

It is an over-the-counter exchange.

D.

It can be used by all U.S citizens.

6. Which of the following is true of an efficient market?

A. Market prices of securities of companies in the same industryare all same.

B.

Market prices adjust quickly to new information as it becomesavailable.

C. All information contained in past prices of a security isreflected in its current price but that there is both public andprivate information that is not.

D.

Securities have no systematic risk.

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