Suppose Lisa and Eric Do Not Purchase an Adequate Amount

question 30

Multiple Choice

Suppose Lisa and Eric do not purchase an adequate amount of insurance on their home.In the event of a claim,they would pay a portion of it.This is the

• A)inflation guard.
• B)added liability.
• C)replacement cost.
• D)coinsurance provision.
• E)70 percent rule.

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Definitions:

Financial Planning

The process of setting objectives, assessing assets and resources, estimating future financial needs, and making plans to achieve monetary goals.

Pro Forma Statement

A financial report created by making assumptions about events and transactions that have not yet taken place.

Financing Policies

Guidelines or principles that a company uses to decide how to finance its activities, including debt and equity financing choices.

Dividend Policies

The guidelines a company follows to decide how much it will pay out to shareholders in dividends.