When the net profit on both the futures and cash position equals zero, this is known as a(n):
a. cross hedge.
b. perfect hedge.
c. imperfect hedge.
d. basis hedge.
e. return hedge.
b
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A company receives $132, of which $12 is for sales tax. The journal entry to record the sale would include a
A. Debit to sales tax expense for $12 B. Credit to sales tax payable for $12 C. debit to sales for $132 D. debit to cash for $120
After the insured passes away, it is discovered that the policy was rated based upon an incorrect age. The client lied about their age when filling out the application 8 years earlier. What effect will this have on the benefit?
A. The policy is incontestable. Full claim will be paid. B. The policy will be rescinded as it is contestable. C. The proceeds payable will be adjusted. D. The shortage of premium will be deducted from the death benefit.