Which of the Following Statements Is FALSE

question 52

Multiple Choice

Which of the following statements is FALSE?

• A)Not all insurable risks have a beta of zero.Some risks,such as hurricanes and earthquakes,create losses of tens of billions of dollars and may be difficult to diversify completely.
• B)When a firm buys insurance,it transfers the risk of the loss to an insurance company.The insurance company charges an upfront premium to take on that risk.
• C)By its very nature,insurance for non-diversifiable hazards is generally a positive beta asset;the insurance payment to the firm tends to be larger when total losses are low and the market portfolio is high.
• D)Because insurance provides cash to the firm to offset losses,it can reduce the firm's need for external capital and thus reduce issuance costs.

Analyze contractual agreements for control implications.

Understand various mating systems and how they relate to parental care and social group structure.

Comprehend the concepts of direct and indirect fitness and how they influence altruistic behaviors.

Identify false statements related to specific behavioral studies or general concepts in animal behavior.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with predetermined dividend payments.

Cumulative

Describing something that increases or accumulates over time, often used in reference to dividends or data.

Par Value

A nominal or face value assigned to securities, such as stock, which has no direct relation to their market value.

Paid-in Capital

The amount of money that a company receives from issuing shares of stock, representing the funds contributed by shareholders in exchange for ownership interest.