Which of the following statements is MOST correct concerning flotation costs?
A) Flotation costs are the same for common stock, preferred stock and bonds because they reflect
mainly printing costs and legal fees.
B) Flotation costs are higher for common stocks than for preferred stocks and bonds due to the
higher level of risk associated with owning common stock.
C) Flotation costs are generally higher for bonds rather than stocks because the dollar amounts
involved are much higher, allowing for economies of scale.
D) Flotation costs as a percentage of gross proceeds increase as the size of the security issue
increases.
Question 2
Which statement is true about medical expense coverage under the boatowners package policy?
A) It pays the medical expenses of a covered person who is injured while in the boat.
B) It pays the medical expenses of another boat operator who is injured as a result of negligent operation of the boat by the insured.
C) It pays the medical expenses of a swimmer or a water skier being towed by another boat if he or she is hit by the insured's boat.
D) It pays the medical expenses of someone on a dock or pier if the insured's boat hits the dock or pier and injures him or her.
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