Which of the following statements about the Homeowners 3 policy is (are) true? I. Losses to the dwelling are always settled on an actual cash value basis. II. Coverage on personal property is limited to 5,000.
A) I only
B) II only
C) both I and II
D) neither I nor II
Question 2
An analyst is evaluating two companies, A and B. Company A has a debt ratio of 50 and
Company B has a debt ratio of 25. In his report, the analyst is concerned about Company B's debt
level, but not about Company A's debt level.
Which of the following would best explain this
position?
A) Company B has much higher operating income than Company A.
B) Company B has more total assets than Company A.
C) Company A has a lower times interest earned ratio and thus the analyst is not worried about
the amount of debt.
D) Company B has a higher operating return on assets than Company A, but Company A has a
higher return on equity than Company B.
TrUe....FaLsE
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