personal finance - final exam review

true

A defined-benefit plan specifies the benefits that you will receive at retirement age.

30%

According to some financial experts, how much of an investment program should a 30-year-old have in safe (non-growth) investments?

Increase credit purchases and make installment payments in order to increase cash available for investing.

All of the following statements are considered to be good advice for a potential investor in performing a financial checkup except

true

Another name for a straight term policy is multiyear level term.

false

As of 2017, an individual can give away up to $14,000 per year before paying an inheritance tax to the IRS.

false

At the closing of a home purchase, the buyer and seller conducts a walk-through of the property.

6.74%

Becky Martinez owns stock in GBX Corporation. The GBX stock has a market value of $85 a share. If Becky receives $5.73 a year in dividends, what is the current yield? (Round your answer to 2 decimal places.)

false

Blue Cross and Blue Shield are two types of Health maintenance organizations.

$256.50

Bob Newsome purchased 150 shares of the New Horizons Growth Fund. The cost for each share at the time of purchase was $57.00. If this fund charges a 3 percent load, what is the commission amount he will pay the investment company? (Round your answer to 2 decimal places.)

false

Each year about 50% of home sales are made by the home's owners.

true

For many people, the easiest way to begin an investment program is to participate in an employer-sponsored retirement account - often referred to as a 401(k) or a 403(b).

$338.00

Francesca withdrew $13,000 from B shares that she owned in the Already Been Counted mutual fund within one year of her purchase. If she must pay a 2.6% contingent deferred sales fee, what will her total fee be?

$13,608

Francesca withdrew $14,000 from B shares that she owned in the Already Been Counted mutual fund within one year of her purchase. If she must pay a 2.8% contingent deferred sales fee, what amount will she actually receive?

true

From both a legal and ethical standpoint, you have an obligation to pay for credit purchases.

the grace period

Georgia was supposed to pay her premium by the 15th of the month. Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium (without penalty)?

6%

Given the information shown here for NMOP Inc., calculate the dividend yield. Annual dividend = $3.9 Number of shares outstanding = 39,000 Current market value per share = $65 Book value per share = $5

$15.20

Given the information shown here for TUV, Inc., calculate the total return. Dividends per share = $1.20 Purchase price (July 15, 2010) = $80 Sell price (July 15, 2011) = $94

Theft of jewelry valued at $25,000.

Homeowner's insurance covers all of the following except

false

If you save on a regular basis, you not have money to pay your bills, make major purchases, meet your living expenses during your retirement, and cope with emergencies.

worker's compensation

Katrina was injured in an accident at work. The benefits she will receive to cover part of her income will come from

$167,597.77

Marcus can afford a monthly mortgage payment of $900. If he is eligible for a 30-year, 5% mortgage (where the mortgage factor is 5.37), how much of a mortgage loan can he afford?

$50.40

Mary Cooper just purchased 90 shares in the All-American Fidelity Fund. The purchase cost for each share was $28. If this fund charges a 2 percent load, what is the total amount of commission she will pay the investment company?

dread disease policy

Miguel is concerned that the health insurance option he is considering plays upon unrealistic fears. He is most concerned about a

adjustable life

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?

false

Only people who are retired can receive a benefit from Social Security.

$443.70

Patsy Banz owns 493 shares of General Mills Corporation. For the last calendar quarter, General Mills Corporation paid $0.90 a share. What is the total amount she received in her dividend check for last quarter?

$1,040.00

The Anderson Balanced mutual fund charges a sales load of 4.00%. If you invest $26,000, how much must you pay in commissions?

$28,590.00

The Anderson Balanced mutual fund charges a sales load of 4.70%. If you invest $30,000, how much of your investment will actually be used to purchase shares in the fund?

$27.00 NAV per share

The Capitalist Mutual Fund's portfolio is valued at $64.2 million. The fund has liabilities of $7.5 million, and the investment company sponsoring the fund has issued 2,100,000 shares. What is the fund's net asset value (NAV)? (Round your answer to 2 decimal places.)

negligence

The failure to take ordinary or reasonable care to prevent accidents from happening is called

true

The lower the interest-adjusted index, the lower the cost of a life insurance policy.

asset allocation

The process of spreading your assets among several different types of investments to lessen risk is called

true

The sooner a person is likely to die, the higher his or her premiums will be.

true

The value of a bond is closely tied to the corporation's ability to repay its bond indebtedness at maturity.

internal limits

This health insurance provision sets specific levels of repayment for certain services.

inheritance tax

This tax is only imposed by state governments.

testamentary tax

This trust is established by your will and becomes effective upon your death.

true

Two-thirds of all health insurers use prescription data to deny coverage to some individuals (and families) and to charge higher premiums to others.

false

Uninsured motorist's protection automatically covers you and your family members as well as damage to the vehicle itself.

$15.00

Using the information given here, what is the price-earnings ratio for DEF Company? (Hint: This is a two-step calculation.) (Round your answer to 2 decimal places.) Income = $912,000 Number of shares outstanding = 120,000 Price per share = $114.00 Book value per share = $10

$12.00

Using the information given here, what is the price-earnings ratio for DEF Company? (Round your answer to 2 decimal places.) After-tax income = $414,000 Number of shares outstanding = 90,000 Price per share = $55.20 Book value per share = $10 Earnings per share = $4.60

Take steps to remove excess furniture to make areas look less cluttered and therefore larger.

Walt has decided to sell the home he has lived in for 50 years. The house has two bedrooms on the first floor, a finished basement, and a finished attic with a low ceiling. To prepare his home for sale, he should

false

When Brett's apartment lease ends, he should receive his entire security deposit back even though the carpet has been damaged while he was living there.

estate tax

When you die, this tax will be based on the fair market value of your investments, property, and bank accounts less an exemption (of $5.49 million in 2017).

fixed annuity

Which of the following allows an individual to receive a fixed amount of income over a certain period of time, or over his or her life?

Property taxes.

Which of the following expenses is NOT usually incurred by a tenant?

risk maximization

Which of the following is NOT one of the commonly used general risk management techniques?

maintain good grades in college

Which of the following should reduce your auto insurance premium?

true

Workers are considered disabled if they have a physical or mental condition that prevents them from working and that is expected to last for at least 12 months or to result in death.

He should insure the building under the replacement value method to receive the full cost of repairing or replacing it.

Zach is applying for insurance for his new home. Which of the following is correct?