CPCU 540 Q&A Exam Compilation Bundle

Define Merger Type of Acquisition in which two or more companies/entities are combined into one Define Acquisition The purchase of one company's stock by another company. Define Consolidation A combination of two or more Business entities into a new entity Define Takeover The assumption of...

What is a security? Paper or electronic evidence of an equity or debt instrument What is a financial market? Mechanism for trading securities What are the two types of financial markets? 1. Money markets - short term securities 2. Capital markets - long term securities What are the four co...

Define Vertical Analysis Use of common-size statements to highlight basic relationships among items within a single set of Financial Statements Define Trend Analysis A comparison of Financial Statement Data across 2 or more periods. This Identifies patterns in the past data & then projects these ...

Based on the matching principle, an insurer's premium revenue for a policy should be recognized Evenly over the term of the policy The role of the policyholders' surplus is to Provide a cushion to ensure the insurers has enough resources to meet obligations to the policyholders There is an a...

A key accounting concept that an organization should be valued as if it will continue to operate indefinitely. This view is known as the Going Concern Concept Statutory accounting adopts a conservative approach to valuing most assets and liabilities, resulting in a conservative statement of polic...

Financial statemetns often serve as effective windows into an organizations health by communicating information about its financial activities and the results of those activities. Types of Financial Statements Individually, each provides valuable information but when analyzed together, they prese...

What are the 3 Factors that determine Future Value of a monetary sum? 1) Initial or Present Value 2) Applicable Rate of Return 3) Length and number of Periods over which it will grow Contrast Simple Interest with Compound Interest Simple Interest is earned solely on the original amount invested...

Define Liquidity The ease of which an asset can be converted to cash with little or no loss of value .Define Unearned Premium Reserve An insurer's liability representing the amount of premiums received from Policyholder's that are not yet earned Define Earned Premiums Portion of written prem...

Account Receivable Turnover Credit Sales / Accounts Receivable EFFICIENCY Asset Turnover Sales / Total Assets EFFICIENCY Inventory Turnover Cost of Goods Sold / Inventory EFFICIENCY Current Ratio Current Assets / Current Liabilities LIQUIDITY Ability to meet current liabilit...

Identify the relationship between a corporate finance department and accounting Responsibilities of a Corporate finance department typically include: Acquiring, investing, and managing a companies financial resources, as well as conducting some accounting activities. What types of information can...

All underwriters at Wheaton Insurance are required to evaluate the clients' assets and liabilities before renewing a policy for a retail sales company. The underwriters use this evaluation to Screen for an acceptable level of financial stability An insurance claim representative might likely use...

Which one of the following would best be the reason for maximization of shareholder wealth as a goal of corporate finance 1. To assist in meeting regulatory requirements 2. To maintain a market to raise additional capital 3. To maintain the integrity of the corporate identity 4. To retain cu...

Vertical Analysis The use of common-size statements to highlight basic relationships among items within a single set of financial statements 3.3 Trend Analysis An analysis that identifies patterns in past data and then projects these patterns into the future 3.3 Ratio analysis A financial anal...

C. Generally determines the cost of long-term financing. Activity within the financial markets is important to corporations. The capital market is significant because it Select one: A. Provides information for accounting statements. B. Dictates the assets needed to support the cost of capital. C...