Administrator

3000. Operating Leverage is the response of changes in __________

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EBIT to the changes in sales
EPS to the changes in EBIT
Production to the changes in sales
None of the above
✅ The correct answer is A.
Operating Leverage is the response of changes in EBIT to the changes in sales. Operating leverage is a cost-accounting formula that measures the degree to which a firm or project can increase operating income by increasing revenue.

3002. Costs incurred in production process that yield range of products simultaneously are known as

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separable costs
joint costs
main costs
split off costs
✅ The correct answer is B.
Costs incurred in production process that yield range of products simultaneously are known as joint costs. Joint cost is the manufacturing cost incurred on a joint production process which takes common inputs but simultaneously produces multiple products called joint-products.

3005. An expected rate of return is subtracted from capital gains yield to calculate

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expected dividend yield
capital earning
casual growth
specialized growth rate
✅ The correct answer is A.
An expected rate of return is subtracted from capital gains yield to calculate expected dividend yield. The dividend yield is the ratio of a company’s annual dividend compared to its share price.

3008. The marketplace for auction sites is best described as __________.

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many sites attaining similar levels of profitability
easy to enter due to minimal barriers
populated mostly with small, thriving specialty sites
dominated by a handful of sites with established networks
✅ The correct answer is D.
The marketplace for auction sites is best described as dominated by a handful of sites with established networks.

3010. In arbitrage pricing theory, higher required rate of return is usually paid on stock

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higher market risk
higher dividend
lower dividend
lower market risk
✅ The correct answer is B.
In arbitrage pricing theory, higher required rate of return and higher dividend is usually paid on stock. The Arbitrage Pricing Theory (APT) is a theory of asset pricing that holds that an asset’s returns can be forecasted with the linear relationship of an asset’s expected returns and the macroeconomic factors that affect the asset’s risk.

3012. Which of the following constitute Breach of Utmost Good faith?

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Non-Disclosure
Misrepresentation
Both A & B
None of the above
✅ The correct answer is C.
Misrepresentation and non-disclosure constitute breach of utmost good faith. In an insurance policy, misrepresentation on the behalf of the insured gives the insurance company a right to terminate the policy. Non-disclosure means failure to divulge a relevant fact when applying for an insurance policy. This is a violation of the principle of good faith which should be observed in insurance negotiations.