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CPCU 540 BRAND NEW FINAL EXAM (TEST BANK) LATEST UPDATE |VERIFIED ACTUAL EXAM QUESTIONS WITH DETAILED CORRECT ANSWERS ALL GRADED A+|GUARANTEED SUCCESS$13.49
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CPCU 540 BRAND NEW FINAL EXAM (TEST BANK) LATEST UPDATE |VERIFIED ACTUAL EXAM QUESTIONS WITH DETAILED CORRECT ANSWERS ALL GRADED A+|GUARANTEED SUCCESS
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Course
CPCU 540
Institution
CPCU 540
CPCU 540 BRAND NEW FINAL EXAM (TEST BANK) LATEST UPDATE |VERIFIED ACTUAL EXAM QUESTIONS WITH DETAILED CORRECT ANSWERS ALL GRADED A+|GUARANTEED SUCCESS
Activity within the financial markets is important to corporations. The capital market is significant because it
Select one:
A. Pr...
CPCU 540 BRAND NEW FINAL EXAM
(TEST BANK) LATEST UPDATE 2024-
2025|VERIFIED ACTUAL EXAM
QUESTIONS WITH DETAILED CORRECT
ANSWERS ALL GRADED
A+|GUARANTEED SUCCESS
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. Generally determines the cost of long-term financing.
D. Determines the amount of capital available through borrowing. - ANSWER-✅C.
Generally determines the cost of long-term financing.
Finance - ANSWER-✅Which one of the following is described as a discipline
concerned with determining value and making decisions about money, banking,
credit, investments, and other assets?
How would an underwriter best use a potential insured's financial statements when
underwriting the risk?
Select one:
A. To determine how much actual premium the risk can pay
B. To determine if there is any potential growth for this risk
C. To determine if the risk is committing any fraud in their operations
D. To assess the ability of the risk to make timely premium payments - ANSWER-✅D.
To assess the ability of the risk to make timely premium payments
An insurance claim representative might likely use information contained in the
insured's financial statements to
Select one:
,A. Determine fault after the injury to a customer.
B. Determine the cost to repair a building after a fire.
C. Determine if a moral hazard exists after a fire loss.Correct. They would want to
determine if a moral hazard exists after a fire loss.
D. Determine if coverage exists for a damaged auto. - ANSWER-✅C. Determine if a
moral hazard exists after a fire loss.
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
A. Screen for an acceptable level of financial stability.Correct. The underwriters use
this evaluation to screen for an acceptable level of financial stability.
B. Forecast the value of insurable inventory.
C. Evaluate the adequacy of the gross profit margin.
D. Estimate the value of non-reported inventory. - ANSWER-✅A. Screen for an
acceptable level of financial stability.
Sean owns a retail men's clothing store. After a recent fire, the insurance adjuster
requested copies of the store's most recent financial statements. The adjuster is
most likely to use the statements to
Select one:
A. Estimate the inventory on hand at the date of loss.
B. Evaluate the marketability of the inventory.
C. Forecast the store's immediate cash needs.Incorrect. The adjuster is most likely to
use the statements to estimate the inventory on hand at the date of loss.
D. Classify the inventory loss as covered or denied. - ANSWER-✅A. Estimate the
inventory on hand at the date of loss.
The analysis of a potential insured's financial statements can determine an insurer's
decisions on
Select one:
A. Underwriting.Correct. The underwriting decision about whether to insure an
account requires an analysis of the potential insured's financial statements to
determine the appropriateness of the type and amount of coverage requested.
B. Claim handling.
C. Regulatory reporting.
D. Policy interpretation. - ANSWER-✅A. Underwriting.
Sarbanes- Oxley Act of 2002 - ANSWER-✅A federal statutory law governing
corporate directors in the areas of investor protection, internal controls, and
penalties, both civil and criminal.
the requirements for maximizing shareholder wealth include all of these, EXCEPT:
Focusing on current profit
Recognizing the effects of risk, dividends, and growth on the value of the stock
Focusing on the best use of corporate financial resources to increase the value of
the stock - ANSWER-✅Focusing on current profit
,In addition to complying with laws and regulations, a corporate code of ethics
provides
Select one:
A. Financial transparency to management.
B. Maximization of shareholder wealth.
C. The establishment of corporate goals.
D. A means of managing ethics in the workplace. - ANSWER-✅D. A means of
managing ethics in the workplac
Which one of the following is a consequence of focusing on the maximization of
profits?
Select one:
A. Optimizing the return to shareholders for the use of their capital
B. Recognizing the effects of risk, dividends, and the value of the stock
C. Electing accounting treatments that make financial statements less useful to
potential investorsCorrect. A consequence of focusing on the maximization of profits
is electing accounting treatments that make financial statements less useful to
potential investors.
D. Focusing on long-term growth and profitability to the detriment of current profits
- ANSWER-✅C. Electing accounting treatments that make financial statements less
useful to potential investors
Which one of the following would be the best reason for maximization of
shareholder wealth as a goal of corporate finance?
Select one:
A. To assist in meeting regulatory requirements.Incorrect. It would be to maintain a
market to raise additional capital.
B. To maintain a market to raise additional capital.
C. To maintain the integrity of the corporate identity.
D. To retain customers in a competitive marketplace. - ANSWER-✅B. To maintain a
market to raise additional capital.
The Sarbanes-Oxley Act of 2002
Select one:
A. Requires principal officers to guarantee completeness and accuracy of financial
reports.Incorrect. The Sarbanes-Oxley Act of 2002 created a board to regulate public
accounting firms that audit publicly traded corporations.
B. Enhanced financial disclosure requirements for all corporations issuing stocks.
C. Subjects officers to civil penalties for failing to fulfill requirements.
D. Created a board to regulate public accounting firms that audit publicly traded
corporations. - ANSWER-✅D. Created a board to regulate public accounting firms
that audit publicly traded corporations.
Sarbanes-Oxley requires the principal executive officer and the principal financial
officer to certify the accuracy of which financial reports?
Select one:
, A. Bi-monthly and annual
B. Monthly and quarterly
C. Quarterly and annualCorrect. Sarbanes-Oxley requires the principal executive
officer and the principal financial officer to certify the accuracy of quarterly and
annual financial reports.
D. Semi-quarterly and annual - ANSWER-✅C. Quarterly and annual
Why is it so important for a corporation to adopt a code of ethics?
Select one:
A. A code of ethics allows corporate decisions to be reported on favorably by the
news media.
B. A code of ethics ensures compliance with laws and regulations.Incorrect. A code
of ethics provides a means of actively managing ethics in the workplace.
C. A code of ethics provides a means of actively managing ethics in the workplace.
D. A code of ethics clarifies what is ethical to employees. - ANSWER-✅C. A code of
ethics provides a means of actively managing ethics in the workplace.
A corporate finance department usually performs all the following functions,
EXCEPT:
Capital budgeting
Auditing
Capital structure
Working capital management - ANSWER-✅Auditing
Working capital - ANSWER-✅A liquidity measure that is calculated by subtracting
current liabilities from current assets. It is used to determine a company's ability to
finance immediate operations (to buy inventory, finance growth, and obtain credit).
current assets-current liabilities
Capital structure - ANSWER-✅the mix of long-term debt and equity financing
capital budgeting - ANSWER-✅the process of planning and managing a firm's long-
term investments
Working capital is
Select one:
A. Current liabilities minus current assets.
B. Current liabilities divided by current assets.
C. Current assets minus current liabilities.
D. Current assets times current liabilities. - ANSWER-✅C. Current assets minus
current liabilities.
The ability to meet day-to-day financial obligations relies on
Select one:
A. Adequate working capital.
B. The minimization of current liabilities.
C. The mix of debt and equity.
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