FIN 300 FINAL
This health insurance provision lets your insurer make direct payments to your doctor or hospital. Multiple Choice Assigned benefits Benefit limits Exclusions and limitations Internal limits Service benefits
A
An insurance company will: Multiple Choice Insure speculative and pure risks. Insure pure risk, but not speculative risk. Insure neither pure risk nor speculative risk. Insure speculative risk, but not pure risk. Insure all types of risks.
B
Cindy was contacted by her home insurance agent to discuss ways to decrease her premium. Which of the following should NOT reduce her premium? Multiple Choice Installing an alarm system Increasing the amount of coverage Installing smoke detectors or a fire extinguisher Increasing her deductible Installing dead-bolt locks
B
If you have a loss due to a flood: Multiple Choice Your homeowner's insurance should normally cover the loss. You must have already purchased special coverage if you live in an area that has frequent floods in order to be covered. FEMA (Federal Emergency Management Agency) will automatically provide coverage if this is your second flood loss. You need an umbrella policy for coverage. Your additional living expenses coverage will apply if you move to an area that has not flooded in one year.
B
If you want to purchase term insurance, you will receive all of the following except: Multiple Choice Protection against loss of life for only a specified term. Cash value. Temporary insurance. A benefit during the period it covers, such as 1, 5, 10, or 20 years. A policy whose coverage continues if you stop paying premiums.
B
Madeline had a severe allergy attack and crashed her car into a telephone pole while sneezing. The damage to the telephone pole would be covered under Madeline's: Multiple Choice Uninsured motorist protection. Property damage liability coverage. Collision coverage. Comprehensive physical damage coverage. Bodily injury liability coverage.
B
Which of the following is NOT correct about renter's insurance? Multiple Choice The broad form covers personal property against perils specified in the policy. Renter's insurance covers the building and other structures on the site. The comprehensive form protects personal property against perils not specifically excluded in the policy. Typical coverage pays only the actual cash value of one's losses. Renter's insurance is relatively inexpensive versus homeowner's insurance.
B
The most common risks are: Multiple Choice Personal risks. Property risks. Liability risks. All of these are common risks. None of these are common risks.
D
Which of the following is correct? Multiple Choice The best risk management plan is one that does not change throughout one's life. Once a plan is set up, it should be reviewed every 10 years. A solid risk management plan works well without insurance as a component. One question that should be asked when developing a risk management plan is "What do I need to insure?" The main goal of insurance should be to maximize personal, property, and liability risks.
D
An employer may choose to match the contribution made by employees in a(n): Multiple Choice 401(k) plan or a salary-reduction plan. Money-purchase plan. Stock bonus plan. Profit-sharing plan. Individual retirement account.
a
Jill is 45 years old and thinks that her future tax rate will be lower than what she currently pays, so she wants to defer her taxes on her contributions of up to $6,000 in 2020. Which plan would allow her to meet her goals? Multiple Choice 401(k) plan Regular IRA Roth IRA SEP plan Spousal IRA
b
Marissa purchases $500 of stock directly from a corporation without having to use an account executive or a brokerage firm. She is using a: Multiple Choice Buy-and-hold technique. Direct investment plan. Correct Direct reinvestment plan. Dollar cost averaging technique. Margin technique.
b
Nancy is studying the health insurance plan options offered by her employer. She wants a policy that will have the insurance pay a percentage of her medical expenses after she meets her deductible. She should review the: Multiple Choice Deductible. Coinsurance. Stop-loss provision. Hospital indemnity policy. Dread disease policy.
b
Pam just started working at XYZ Widget Company and finally wants to get insurance coverage through her employer. She does not want to take a medical exam to get coverage, because she has some underlying health conditions and is concerned that she might not qualify for a policy. Which of the following life insurance policies should she apply for? Multiple Choice Adjustable life Group life Limited life Universal life Variable life
b
Terry wants to begin investing and needs some guidance because he is uncomfortable making investment decisions. He should use a(n): Multiple Choice Discount broker. Full-service broker. Market maker. Online broker. None of these is correct.
b
The type of health insurance coverage that may specify the maximum payment amount for each type of operation is: Multiple Choice Dental expense. Surgical expense. Hospital expense. Physician expense. Major medical expense.
b
Todd plans to purchase a life insurance policy from a stock life insurance company. What kind of policy is he planning to purchase? Multiple Choice Dividend policy Nonparticipating policy Mutual policy Participating policy Stock policy
b
Val wants to invest in a fund whose primary objective is to conserve principal, provide income, and provide long-term growth. Which of the following will best meet her needs? Multiple Choice Cyclical funds Balanced funds Junk bond funds Mid-cap funds Short-term corporate bond funds
b
When analyzing a price-earnings ratio: Multiple Choice A higher price-earnings ratio indicates pessimism because the price is too high compared to the earnings. The higher the price-earnings ratio, the more investors are paying for earnings. A low ratio indicates that investors expect higher earnings in the future. Price-earnings ratios are helpful when comparing two companies in the same industry, but not to the market in general. The price-earnings ratio alone provides enough information to allow an investor to decide whether to invest in a particular stock.
b
When conducting a financial analysis for retirement planning: Multiple Choice A large mortgage should not affect your financial planning. Investments should be evaluated to determine whether their income can help cover living expenses. Keeping your current, large house will be cheaper to maintain than a move to a smaller house. Life insurance should be avoided. All of these are true.
b
When investing, in your role as an investor, you should not: Multiple Choice Evaluate potential investments. Let the investments manage themselves. Monitor the value of investments. Keep accurate records. Consider tax consequences of selling investments.
b
Which of the following describes a growth company? Multiple Choice The company pays a large dividend. Profits are reinvested in the company for future growth. Sales revenues are not increasing. The company has managers who cannot solve the problems associated with rapid expansion. The company is considered a conservative company for investors.
b
eanne wants to purchase a life insurance policy with guaranteed premiums. What kind of policy would she want to purchase? Multiple Choice Dividend policy Nonparticipating policy Mutual policy Participating policy Stock policy
b
If you bought a stock on June 15, 2018, and sold it on July 15, 2020, you would likely be classified as a(n): Multiple Choice Speculator. Trader. Investor. None of these are correct. All of these are correct.
c
Investors who earn larger returns because they borrow part of the money needed to buy a particular stock are using which of the following techniques? Multiple Choice A call option Direct investing Buying on margin A put option Selling short
c
Jack needs comprehensive medical coverage. However, his income is very low. What plan should he investigate? Multiple Choice Medicare Part A Medicare Part B Medicaid Medigap Medicare Part C
c
Jackson was interested in purchasing low-value securities that were not listed on the NYSE. He probably used _____ to complete his transaction. Multiple Choice an initial public offering an investment bank the over-the-counter market a primary market the securities exchange commission website
c
Jacob is concerned that his out-of-pocket health care expenses will be quite high, so he is considering adding contributions to a tax-free account that he can use with his high-deductible policy to cover catastrophic expenses. What kind of plan does he have? Multiple Choice FSA HRA HSA Medicare Self-funded health plan
c
Julian's annual contributions to his retirement are not tax-deductible, but his earnings accumulate tax-free. He is investing in a: Multiple Choice 401(k) plan. Regular IRA. Roth IRA. SEP plan. Spousal IRA.
c
Kelly bought some stock using an investment bank from the issuer of those securities. She bought her shares: Multiple Choice From a specialist. From an investment bank. On the primary market. On the secondary market. From a securities exchange.
c
Multiple Choice They will choose investments with higher risks. Their choices of investments will not be affected by risk. They will choose investments with less risk. They will choose investments with no risk. They will move all of their money into a savings account.
c
When planning for retirement, inflation: Multiple Choice Decreases through retirement. Should be ignored since it will have no effect on retirement funding. Should be considered since income received earlier in retirement will buy more than the same amount received later in retirement due to the rising prices of goods and services. Is unimportant since pension income does not change in retirement. Should be recognized since it will increase the value of income received in retirement.
c
When you sell your shares in a mutual fund, you may receive a profit that results from an increase in value called a(n): Multiple Choice Capital gain distribution. Income dividend. Capital gain. Mutual fund distribution. Fund tax.
c
Which of the following is NOT a feature of whole life insurance? Multiple Choice It accumulates cash value. It provides both a death benefit and a savings component. The policy will return all premiums if you survive to the end of the policy. You can borrow from your cash value but must pay interest on the loan. The policy requires that you pay a specified premium each year for the rest of your life.
c
Which of the following is a problem with taxation of mutual funds? Multiple Choice Professional management The possibility to eliminate taxes if held in a Roth individual retirement account Being required to report reinvested income dividends and capital gain distributions on your federal tax return as current income Tax deferral if the fund is held in a retirement account like a 401(k) account The diversification offered to investors
c
Which of the following is not a way one can access reliable information about mutual funds on the internet? Multiple Choice Find statistical information from the web page of the investment companies that sponsor mutual funds Obtain current market values for mutual funds by using a search engine such as http://finance.yahoo.com Review blogs from amateur investors about their favorite mutual funds Research reports for mutual funds using professional advisory services All of these are reliable sources of information about mutual funds.
c
Which of the following is true about mutual funds and taxes? Multiple Choice Capital gain distributions are taxed as short-term capital gains. Income dividends are taxed quarterly. Investment companies are required to send each shareholder a year-end statement that specifies how much each received in income dividends and capital gain distributions. Capital gains distributions are not reported on your federal tax return. Taxes can be eliminated if you hold your mutual fund shares in your 401(k) retirement account.
c
Which of the following securities are rated by three companies? Multiple Choice Treasury bills Treasury notes Corporate bonds Treasury bonds TIPS
c
Which of the following should reduce your auto insurance premium? Multiple Choice An increase in your number of claims Paying your speeding tickets immediately Maintaining good grades in college Decreasing your deductible Stopping smoking
c
A provision in a health insurance policy that sets specific levels of repayment for certain services is called a(n): Multiple Choice Reimbursement. Out-of-pocket limit. Deductible. Internal limit. Indemnity.
d
A young employee is buying individual life insurance and is worried about the impact inflation will have on his life insurance coverage. Which of the following riders should he consider? Multiple Choice Waiver of premium disability benefit Accidental death benefit Guaranteed insurability option Cost-of-living protection Accelerated benefits
d
Albert left his vehicle parked on the street in the front of his house when he went on vacation. While he was gone, his street flooded and his car was severely damaged. This damage would be covered under his: Multiple Choice Uninsured motorist protection. Property damage liability coverage. Collision coverage. Comprehensive physical damage coverage. Bodily injury liability coverage.
d
Annual reports: Multiple Choice Are available only online from a corporation's internet website. Are available only to current stockholders. Include the same information as a prospectus. May be sent to all stockholders on an annual basis. Include estimated financial data only.
d
Estate planning is an essential part of: Preretirement planning. Budgeting basic living expenses. Vacation planning. Both retirement planning and financial planning. Both financial and vacation planning.
d
Henry was driving at dusk and hit a deer running across the road. His damage would be covered under his: Multiple Choice Uninsured motorist protection. Medical payments coverage. Collision coverage. Comprehensive physical damage coverage. Bodily injury liability coverage.
d
If you bought a stock on July 1, 2020, and sold it on July 15, 2020, you may be a(n): Multiple Choice Speculator. Trader. Investor. Two of these are correct. Three of these are correct.
d
If you choose to insure your home or your vehicle, you are using: Multiple Choice Risk avoidance. Risk reduction. Risk assumption. Risk shifting. Risk increasing.
d
Lawrence is self-employed and wants to establish the simplest type of retirement plan. He should set up a: Multiple Choice 401(k) plan. Regular IRA. Roth IRA. SEP plan. Spousal IRA.
d
Mark was severely injured while on vacation and expects to be unable to work for at least 12 months. Because of his injury, he should expect to be eligible for disability income from: Multiple Choice A public income insurance program. Medicaid. Medicare. Social Security. Worker's compensation.
d
Patrick sold his GE shares using his online broker. One can say that he sold them: Multiple Choice At an initial public offering. Through an investment bank. In the primary market. In the secondary market. At a securities exchange.
d
Sally wants to invest in a fund that invests only in stock. Which of the following will meet her needs? Multiple Choice Asset allocation funds Balance funds Junk bond funds Mid-cap funds Short-term corporate bond funds
d
Speculative investments include all of the following except: Multiple Choice Options. Commodities. Precious stones. Savings accounts. Precious metals.
d
The duration of benefits for a disability income insurance plan can be: Multiple Choice For only a few years. Until age 65. For life. All of these are possibilities. None of these is correct.
d
The type of health insurance coverage that may cover routine doctor visits, X-rays, and lab tests is: Multiple Choice Dental expense. Surgical expense. Hospital expense. Physician expense. Major medical expense.
d
This health insurance provision sets specific levels of repayment for certain services. Multiple Choice Assigned benefits Copayment Exclusions and limitations Internal limits Service benefits
d
Trusts and estates must pay quarterly estimated taxes based on taxable income for: Multiple Choice Estate tax. Gift tax. Inheritance tax. Federal income tax purposes. Will tax.
d
When monitoring the value of your stock investments, it is important to: Multiple Choice Wait until you sell them to determine their value. Track the prices in the December copy of a financial magazine. Estimate their values based on similar stocks. Determine their values using the price quotations reported on the Internet and in newspapers. Assume that the values remain the same as long as you hold them.
d
When should you consider the tax consequences of selling your investments? Multiple Choice Only when you make your own decisions Only when you have professional help When the taxes due are less than $300 per transaction When you make your own decisions or when you have professional help When you are working with professionals and taxes due are less than $300 per transaction
d
Which of the following are major reasons that investors purchase mutual funds? Multiple Choice Diversification Professional management Loads of up to 8.5% Diversification and professional management All of these options are positive reasons to invest in mutual funds.
d
Which of the following is NOT a type of permanent insurance? Multiple Choice Whole life Straight life Ordinary life Term life Cash value
d
Which of the following is correct about your health plan's summary plan description? Multiple Choice It contains information about the coverage of dependents. It contains information about what services will require a copay. It contains information about circumstances when your employer can terminate your health plan benefits. All of these are correct. None of these is correct.
d
Which of the following is incorrect? Multiple Choice Disability income insurance provides regular cash income when you're unable to work because of a disability. Disabilities can include pregnancy, a non-work-related accident, or an illness. The exact definition of disability varies from insurer to insurer. All disability policies pay you if you cannot work at your regular job. Disability can cause even greater financial problems than death.
d
Which of the following is not a true statement? Multiple Choice The decision to start an investment plan is one you must make for yourself. To be useful, investment goals must be specific and measurable. The sooner you start an investment program, the more time your investments have to work for you. Because investment goals deal with the future, it is ineffective to make long-term goals. A short-term investment goal involves a period of 12 months.
d
Which of the following is not correct about the 12b-1 fee? Multiple Choice It is also known as a distribution fee. A no-load fund can charge a 12b-1 fee of up to 0.25 percent of its assets. It is often an ongoing fee that is charged on an annual basis. It needs to be disclosed in the annual report but not in the prospectus. It is used to defray the costs of advertising and marketing a mutual fund and to fund commissions paid to a broker who sold you shares in the mutual fund.
d
Which of the following provisions requires the policyholder to again qualify as an acceptable risk and pay overdue premiums with interest in order to put a lapsed policy back in force? Multiple Choice Incontestability clause Misstatement of age provision Naming a beneficiary Policy reinstatement The grace period
d
Which of the following steps is not a factor to be considered before making your first investment? Multiple Choice Work to balance your budget Manage your credit card debt Have access to other sources of cash for emergency needs Save at least $10,000 to invest Start an emergency fund
d
Which of the following would be considered a safe investment? Multiple Choice Options Collectibles Precious metals Savings accounts Commodities
d
Who is most likely to use a home health care agency? Multiple Choice A mother who is looking for a plan to cover immunizations for her children. A healthy young adult. A family with teenagers who need annual check-ups for sports at school. An elderly neighbor. All of these would be likely to use a home health care agency.
d
Medical payments coverage applies to medical expenses of: Multiple Choice Anyone who is injured in your vehicle, including you. Anyone in your vehicle who is injured, except the driver. The driver, but no passengers who are injured. The owner of the vehicle, but not other passengers.
a
Molly is thinking about buying a type of whole life insurance policy, but she is not sure about how much she will need in the next few years. She may need to change her coverage as her needs change. Which of the following policies would meet her needs? Multiple Choice Adjustable life Group life Limited life Universal life Variable life
a
Patrick has an old car and wants to keep his insurance costs down, but he wants coverage in case he damages the property of others, including street signs and telephone poles. In order to minimize the financial impact of an accident he may cause, he should, at a minimum, carry which type of insurance? Multiple Choice Property damage liability coverage Collision coverage Comprehensive physical damage coverage Bodily injury liability coverage Medical payments coverage
a
Payments to a fund's shareholders that result from the sale of securities in the fund's portfolio are: Multiple Choice Capital gain distributions. Income dividends. Capital gains. Mutual fund money. Fund taxes.
a
Professional advisory services provide detailed information about mutual funds. Which of the following is not a professional advisory service? Multiple Choice Dun and Moody's Refinitiv Lipper Morningstar, Incorporated Value Line All of these are professional advisory services that provide information about mutual funds.
a
The potential return on any investment should: Multiple Choice Be directly related to the risk the investor assumes. Be inversely related to the risk of the investment. Not have any relationship to the risk of any investment. Be inversely related to the risk the investor assumes. Be guaranteed.
a
This trust is designed to allow married couples to take full advantage of the federal estate tax exemption. Multiple Choice Credit-shelter trust Revocable trust Irrevocable trust Living trust Testamentary trust
a
Thomas wants to invest in a fund that invests in stock, bonds, and money market instruments. Which of the following will meet his needs? Multiple Choice Asset allocation funds Aggressive growth funds Junk bond funds Mid-cap funds Short-term corporate bond funds
a
When Stanley was visiting Elaine, he tripped on her front porch step and sprained his ankle. His injuries were covered by: Multiple Choice Elaine's medical payments coverage. Stanley homeowner's policy. Elaine's health insurance coverage. Elaine's life insurance policy. The insurance policy of the mason who installed the front porch step 15 years ago.
a
When you die, this tax will be based on the fair market value of your investments, property, and bank accounts less an exemption (of $11.58 million in 2020). Multiple Choice Estate tax Gift tax Inheritance tax Trust federal income tax Will tax
a
When you retire versus now, you will probably spend less money on: Multiple Choice Clothing. Health insurance. Medical care. Recreation. All of these are correct.
a
Which of the following features is a benefit for investors of municipal bonds? Multiple Choice Interest may be tax-exempt at the federal level. Interest may be tax-deductible at the federal level. The face value may be tax-deductible at the state level. The face value may be a tax credit at the federal level. All payments are tax-deductible at all governmental levels.
a
Which of the following questions should one ask when developing a risk management plan? Multiple Choice What do I need to insure? How much should I insure something for? What kind of insurance should I buy? Whom should I buy insurance from? All of these questions should be asked when developing a risk management plan.
a
Professional advisory services provide research on mutual funds in a report that includes all of the following areas except: Multiple Choice A historical profile. Statistical information. Performance, risk, and portfolio analysis. A summary of the analyst's research. All of these are included by professional advisory services.
e
Robert's wife Fiona does not work, and they file a joint tax return. Robert can contribute on behalf of Fiona into a: Multiple Choice 401(k) plan. Regular IRA. Roth IRA. SEP plan. Spousal IRA.
e
Sean's estate planning should: Multiple Choice Consist of acquiring assets using debt. Designate distribution of assets first to his cousin, then distribute whatever is left to his wife. Ignore his beneficiaries. Consist primarily of a will. Take the needs of his wife and children into account.
e
This trust is established by your will and becomes effective upon your death. Multiple Choice Credit-shelter trust Disclaimer trust Irrevocable trust Living trust Testamentary trust
e
When considering why to buy annuities, which of the following statements is correct? Multiple Choice It is better to fund a fixed annuity before fully funding your IRA, Keogh, or 401(k). The timing for payments of a fixed annuity is variable. It is better to fund a variable annuity before fully funding your IRA, Keogh, or 401(k). A fixed annuity is one where the investments put into the annuity are variable. It is better to fully fund your IRA, Keogh, or 401(k) before buying an annuity.
e
Which of the following is NOT a type of permanent life insurance? Multiple Choice Whole life Variable life Universal life Adjustable life Decreasing term
e
Which of the following is NOT one of the commonly used general risk management techniques? Multiple Choice Risk reduction Risk assumption Risk shifting Risk avoidance Risk maximization
e
Which of the following is correct? Multiple Choice The ability to generate earnings is a minor factor in determining the value of a stock. Corporate earnings are reported in the proxy statement. Earnings per share uses the price of the stock in the calculation. The price/earnings ratio should not be used to evaluate stock investments. The price/earnings ratio is the price of a share of stock divided by the corporation's earnings per share of stock.
e
Which of the following is not correct? Multiple Choice When evaluating a mutual fund, an important consideration is how long the present fund manager has been managing the fund. Over many years, the majority of managed mutual funds have failed to outperform the Standard & Poor's 500 stock index. Managed funds may be open-end funds or closed-end funds. A benchmark of a good fund manager is the ability to increase share value when the economy is good and retain that value when the economy is bad. A managed fund will outperform an index fund only 60% of the time
e
Which of the following statements is correct? Multiple Choice A deferred annuity allows an individual to receive payments from an annuity immediately. A deferred annuity allows an individual to receive payments from a life insurance policy immediately. A life insurance policy allows an individual to receive payments from an annuity beginning at once. A deferred annuity allows an individual to receive payments from a life insurance policy at some future date. An immediate annuity allows an individual to receive income payments from an annuity beginning at once.
e
Which of the following would be considered speculative investments? Multiple Choice Government bonds Savings accounts Certificates of deposit Most corporate bonds Precious metals
e
Yvonne's employer offers a health plan that has a group of doctors and hospitals that agree to provide specified medical services to members at prearranged fees. This health plan offers some flexibility since members can either visit a physician from a list or go to their own doctors. What kind of plan does her employer offer? Multiple Choice Medicaid Public insurance company Hospital and medical service plan Medicare Preferred provider organization (PPO)
e
After you purchase an investment, you should: Multiple Choice Assume that your investment is tax-free. Continually evaluate your investment. Ignore other potential investments. Leave recordkeeping to the financial adviser. Let the investment manage itself.
b
All of the following statements are considered to be good advice for a potential investor in performing a financial checkup except: Multiple Choice Work to balance your budget. Increase credit purchases and make installment payments in order to increase cash available for investing. Manage your credit card debt. Start an emergency fund. Establish a line of credit for emergency needs.
b
All of the following statements are correct except: Multiple Choice Dividends are paid out of profits. Dividend payments must be approved by the stockholders. A dividend can be a distribution of money, stock, or other property. Dividends are not mandatory. Utility companies typically distribute a higher percentage of earnings than rapidly growing firms.
b
Amanda wants to be part of the most basic form of ownership for a corporation. She should invest in: Multiple Choice Bonds. Common stock. Dividends. A savings account. A proxy.
b
Bill is worried about being able to pay his premium if he is totally and permanently disabled before age 60. Which of the following riders should he consider? Multiple Choice Waiver of premium disability benefit Accidental death benefit Guaranteed insurability option Cost-of-living protection Accelerated benefits
a
Cliff retired 10 years ago and wants to still own a few stocks. Dividends are important to him, and he wants to invest in a large, stable corporation. He should purchase _______ stocks. Multiple Choice blue chip cyclical micro-cap mid-cap penny
a
Gladys wants to set up a trust that is also known as a bypass trust, family trust, "residuary" trust, A/B trust, and exemption equivalent trust. She should set up a(n): Multiple Choice Credit-shelter trust. Revocable trust. Irrevocable trust. Living trust. Testamentary trust.
a
If you have fully funded your 401(k) and profit-sharing plans up to the allowable limits, then you may want to put away more money for retirement in a(n): Multiple Choice Annuity. Keogh plan. Roth IRA. SEP plan. Spousal IRA.
a
Earnings paid to shareholders that are not related to the sale of securities in the fund's portfolio are called: Multiple Choice Capital gain distributions. Income dividends. Capital gains. Mutual fund money. Fund taxes.
b
Frank, age 38, was killed in a car accident. Which of the following riders provided an additional benefit for his heirs? Multiple Choice Waiver of premium disability benefit Accidental death benefit Guaranteed insurability option Cost-of-living protection Accelerated benefits
b
Which of the following investors would mostly prefer conservative investments with less risk to speculative investments with higher risks? Multiple Choice A 25-year-old single investor with no children with a job that pays $60,000 per year An unemployed single parent who just received a $300,000 divorce settlement A 30-year-old who is independently wealthy and has a separate trust fund for day-to-day expenses A dual-career couple in their 30s with secure jobs whose combined income is $95,000 A healthy 45-year-old who plans to work in his secure job for at least 25 more years
b
Which of the following is NOT an underlying cause of high health care costs? Multiple Choice The use of sophisticated and expensive technologies. Victims of accidents and crimes require fewer emergency medical services than in the past. Regulations that shift costs instead of reducing costs. Duplication of tests. Limited competition and restrictive work rules in the health care delivery system.
b
Which of the following is correct for a closed-end fund? Multiple Choice It is not traded on a securities exchange. The price of its shares is determined by supply and demand, by the value of stocks in the portfolio, and by investor expectations. It is not actively managed by professional fund managers. Investors are free to buy and sell shares at the net asset value. Its load cannot exceed 2 percent.
b
Which of the following is correct? Multiple Choice A broker pays an investor interest on money borrowed to purchase stock on margin. Selling short is selling stock borrowed from a brokerage firm. A put option is the right, but not the obligation, to purchase a stock at a specified price by a given date. A brokerage firm typically receives double its commission when stock is bought and sold when the investor is selling short. If the stock price increases and you purchased stock on margin, you may receive a margin call.
b
Which of the following steps should be completed before making your first investment? Multiple Choice Pick out at least two stocks or bonds to invest in Work to balance your budget Save at least $10,000 to invest Invest in certificates of deposit These steps are all completed at the same time and before your first investment.
b
An estate consists of: Multiple Choice Home, vehicle, and retirement accounts only. Furniture, home, and collections only. Everything you own. Everything you own except your home if you hold a mortgage on it. None of these are correct.
c
Barbara left a skateboard on her front steps. A windstorm swept the skateboard up and the skateboard crashed through her window. The windstorm was a: Multiple Choice Hazard. Negligence. Peril. Premium. Risk.
c
Bonnie is most concerned about being able to buy additional insurance without undergoing medical exams. Which of the following riders should she consider? Multiple Choice Waiver of premium disability benefit Accidental death benefit Guaranteed insurability option Cost-of-living protection Accelerated benefits
c
For which of the following is time an important factor when evaluating a managed mutual fund? Multiple Choice The existence of the underlying index The life of the companies in the fund How long the present fund manager has been managing the fund The status of the economy None of these are correct.
c
Fran is interested in purchasing a major medical policy that limits the total out-of-pocket amount that she will have to pay. She should consider a: Multiple Choice Copay. Coinsurance. Stop-loss provision. Hospital indemnity policy. Dread disease policy.
c
The insurance that helps pay hospital, surgical, medical, and other bills with a low deductible is known as a(n): Multiple Choice Basic health insurance policy. Individual policy. Comprehensive major medical policy. Hospital indemnity policy. Dread disease policy.
c
This life insurance is used to pay off certain debts, such as auto loans, in the event that you die before the debts are paid in full. Which of the following is typically not the best buy for the amount of protection offered? Multiple Choice Group life Term Credit life Endowment life Adjustable life
c
Under the Patient Protection and Affordable Care Act of 2010, which of the following is NOT correct? Multiple Choice New health care plans are required to allow adult children to remain on their parents' insurance policy until age 26. Most insurers must provide preventive care screenings without charging deductibles or copays. Employers must offer continuing coverage through COBRA for up to 24 months after you leave your job. Denial of coverage to children with preexisting medical conditions is prohibited. The Medicaid program for the nation's poorest individuals was expanded.
c
Wendy has had a life insurance policy for five years with her spouse listed as the person who receives the benefit if she dies. She was recently divorced. Which of the following provisions should she take action on? Multiple Choice Incontestability clause Misstatement of age provision Naming a beneficiary Policy reinstatement The grace period
c
Which of the following statements is correct? Multiple Choice For the corporation, interest paid on corporate bonds is not tax-deductible. Bond financing is seldom used to pay for a corporation's ongoing business activities. Bonds are a form of debt financing. Bonds do not have to be repaid at maturity. Interest payments to bond owners are at the discretion of the corporation.
c
Which of the following statements is correct? Multiple Choice The Internet is not to be trusted as a reliable source to evaluate potential investments. Individual company websites usually charge for access to their own financial reports. The Internet provides websites that may be more up-to-date and thorough than printed materials. Websites like Yahoo! Finance are not dependable. None of these is correct.
c
All else held constant, which of the following is typically true about an elimination period? Multiple Choice Premiums for a plan with an elimination period of 30 days will be less than premiums for a plan with an elimination period of 45 days. Premiums for a plan with an elimination period of 50 days will be the same as premiums for a plan with an elimination period of 75 days. Premiums for a plan with an elimination period of 40 days will be less than premiums for a plan with an elimination period of 75 days. Premiums for a plan with an elimination period of 90 days will be the same as premiums for a plan with an elimination period of 60 days. Premiums for a plan with an elimination period of 90 days will be less than premiums for a plan with an elimination period of 60 days.
e
All of the following are acceptable types of documentation for a household inventory except: Multiple Choice Photographs with dates purchased and values of objects listed on the backs. Video recordings of your home and its contents. Receipts, serial numbers, brand names, and proof-of-value documents. A household inventory form from your insurance agent with purchase dates and costs. A listing of items and their details in your memory.
e
Detailed financial reports from advisory services such as Value Line include all of the following sections except: Multiple Choice The top of the report includes price information and price projections for a share of stock. The middle of the report includes revenues, earnings per share, dividends, etc. The bottom of the report includes information about the type of business and prospects for the future. None of the choices are included. All of the information is included in financial reports. Which of the following is correct?
e
Ethan wants to purchase some stock for the first time. Which of the following is correct? Multiple Choice His account executive should be encouraged to churn Ethan's account to maximize his return. He should use an online broker to get professional help about purchasing stock. His purchase price will exactly equal the number of shares he purchases times the average price per share and is known in advance. If he uses a commission order, he can lock in the price at which he wants to buy the stock. His commission should be lower at an online broker than at a full-service broker.
e
Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase. They will consider factors such as Social Security and liquid assets. Which method are they using to determine their life insurance needs? Multiple Choice Easy method Dual income, no kids method Formal calculation method Nonworking spouse method Family need method
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Government bonds. Savings accounts. Certificates of deposit. Certain corporate bonds. Commodities.
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Homeowner's insurance typically covers all of the following except: Multiple Choice A detached garage. Trees and shrubs. Incorrect A toolshed. Personal property. All of these are covered
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How is an ETF similar to a closed-end fund? Multiple Choice Shares can be traded on a securities exchange. An investor can purchase as little as one share of a fund. Prices for shares are determined by supply and demand, the value of stocks and other investments contained in the fund's portfolio, and by investor expectations. Shares can be traded in the over-the-counter market. All of these are correct.
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If you do not need to access your funds for 5-10 years or more, which of the following investments would be most appropriate? Multiple Choice Cash Certificates of deposit Short-term government bonds Highly rated corporate bonds Stocks and mutual funds
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If you start a new job and are offered the opportunity to participate in the company's 401(k) or 403(b) retirement plan, which of the following decisions can affect your financial future? Multiple Choice Participating in the retirement account as a way to reduce income taxes Participating in the retirement account to take advantage of the employer's matching contributions Choosing mutual funds from a number of different fund options for your retirement account Basing your actual choice of investments on your age, how long before you retire, and your tolerance for risk All of these decisions can affect your financial future.
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Mary Jane owns 1,000 shares of TUV Trucking Company. TUV pays a yearly dividend of $2.00 per share. What is the total annual dividend that Mary Jane will receive? Multiple Choice $0.25 $1.00 $500 $1,000 $2,000
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Megan wants to purchase a type of whole life insurance policy that will allow part of her premium to be invested in stock, bonds, or money market funds. Which of the following policies should she buy? Multiple Choice Adjustable life Group life Limited life Universal life Variable life
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Melinda wants to withdraw some money from her mutual fund. She has a minimum required asset value of $10,000. Which of the following is not an option available for her to systematically withdraw some money? Multiple Choice Withdraw a specified, fixed dollar amount each investment period until the fund has been exhausted. Sell off a certain number of shares each investment period. Withdraw a fixed percentage of asset growth. Withdraw all income dividends and capital gain distributions earned in an investment period. Withdraw all principal and leave interest dividends and capital gain distributions in the account.
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Miguel is concerned that the health insurance option he is considering plays upon unrealistic fears. He is most concerned about a: Multiple Choice Deductible. Coinsurance. Stop-loss provision. Hospital indemnity policy. Dread disease policy.
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Mildred was diagnosed with terminal cancer and knows that she doesn't have long to live. Which of the following riders would allow her to receive cash now? Multiple Choice Waiver of premium disability benefit Accidental death benefit Guaranteed insurability option Cost-of-living protection Accelerated benefits
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Personal liability coverage does NOT cover: Multiple Choice An occasional babysitter. The cost of legal defense. A guest. Members of the homeowner's family who accidentally break a neighbor's antique lamp. A housekeeper.
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Peter is a NASDAQ dealer who matches buy and sell orders for Ford. He is known as a(n): Multiple Choice Account executive. Account investor. Discount broker. Full-service broker. Market maker.
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