Personal Finance Planning Final Exam Ch 1-12

Which of the following would not be considered personal property under a typical homeowner's insurance policy?

buildings and other structures

A ____________ résumé presents a person's education, work experience, and other information in a reverse time-sequence.

chronological

Which one of the following insurance policy provisions requires the insured to pay for part of the loss if the property is not insured for the specified percentage of replacement value?

coinsurance clause

What is the rate that the Federal Reserve charges banks for loans called?

discount

The study of how wealth is created and distributed is:

economics

What type of tax is imposed on the value of an individual's property at the time of his or her death?

estate

Jason Liang has gotten three job offers. He is now looking at the benefits packages of all three to see what he likes and doesn't like. Which step in the career planning process is Jason completing?

evaluate financial and other factors of positions offered.

A _______allows a taxpayer to put pre-tax dollars into an employer-sponsored program to cover medical and child care costs.

flexible spending account

Dean Thomas has an insurance policy that cannot be cancelled unless he fails to pay his premium. What provision in his insurance policy would specify this?

guaranteed renewable

A short-term capital gain is profit earned on an investment that is:

held less than 12 months.

Lori Burroughs wants to gain some needed experience so when she is ready to start a career she has something to offer a company. She has talked to the career placement center at her university. They tell her she can get a job with a local company for the summer and earn college credit while working. Which of the following employment strategies is she pursuing?

internship

Arbitration differs from mediation in that arbitration:

is legally binding.

The legal document involved in renting an apartment is called a(n):

lease

Samuel Jackson has developed a budget that he follows each month. This is a budget that he keeps in his head. He does not write anything down, nor does he use a computer to keep track of this budget. What type of budget has Samuel created?

mental budget

If a homeowner leaves toys on stairs that results in injury to a delivery person, this may be ruled as:

negligence

When buying an automobile, the best warranties are usually offered by a(an):

new car dealer.

If you default on your automobile loan:

no advance notice is required before repossession.

Which one of the following would not be considered personal property by a homeowner's insurance policy?

outside deck

A person with a total tax liability of $4,350 and withholding of federal taxes of $3,975 would:

owe $375.

The purpose of a security deposit is to:

pay for potential damages.

Tim Bridges owns a bass fishing boat. His state imposes an annual 3.25 percent tax on the current value of this boat. What type of tax is this most likely to be?

personal property tax

Medigap is sold or serviced by:

private insurance companies.

The main purpose of the Edmund's Guide is to:

provide price data.

A person's net worth would increase as a result of:

reduced amounts owed to others.

The best way to maintain your credit rating is to:

repay your debts on time.

A personal balance sheet:

reports what an individual or a family owes and owns.

Joan Stone owns a home in Edmond, Oklahoma. She is worried her property might be damaged due to some unforeseen event. This worry about a loss is an example of a:

risk

What is the most popular type of home ownership?

single family dwelling

Who is likely to have the least need for life insurance?

single person living with parents

Tax-deferred retirement plans are a type of:

tax shelter.

Medicare medical insurance is:

voluntary, and you must sign up for coverage.

A credit purchase with 24 monthly payments of $78 and a down payment of $120 would have a total cost of:

$1,992.

Shelly Sanders gets a loan for $3,000 and repays the loan in 12 monthly payments of $258 per month. Under the rule of 78s, what is the amount of interest included in her first payment?

$14.77

During the past month, Jennifer Ernet had income of $3,000. During the month, her net worth declined by $200. If no other financial activities occurred, this means Jennifer's payments for the month were:

$3,200

Caroline lives in City A and earns $50,000 per year. The cost of living index in City A is .8. She is considering a move to City B which has a cost of living index of .9. How large a salary will she require in City B to maintain her current standard of living?

$56,250

Wind damage occurs to your car costing $800 to repair. If you have a $100 deductible for collision and full coverage for comprehensive, what portion of the claim will the insurance company pay?

$800

Ms. Nelson is a single mom with three children; Dana is 18 and a high school senior, Derrick is 20 and a college sophomore, and Tonya is 25 and unemployed. All three children live at home. How many exemptions can Ms. Nelson claim on her tax return?

4

The baby boom generation currently represents about 30 percent of the population but holds nearly ____________ percent of the debt outstanding.

60

What percent of all applicants who apply for life insurance are found to be insurable?

98

The hospital insurance portion of Medicare helps pay for:

All the answers are correct #5 1) inpatient hospital care. 2) inpatient care in a skilled nursing facility. 3) home health care. 4) hospice care. 5) all of the other types of care listed.

When more than one payment is made on a simple interest loan, the method of computing interest is known as the declining balance method.

True

When one money management decision is made, an alternative must be given up.

True

You should sign your new credit cards as soon as they arrive.

True

Karen Price has created a financial statement for herself that lists all of the assets she owns as well as the debts she owes. This would be an example of:

a balance sheet.

Ownership of an individual housing unit in a building is commonly called:

a condominium.

Higher interest rates can be caused by:

a lower money supply.

Brad Johnson has a goal of "saving $50 a month for vacation." Brad's goal lacks:

a time frame.

The first step of the financial planning process is to:

analyze your current personal and financial situation.

Unfortunately, most salaried workers in the United States do not participate in the Social Security programs.

False

Title XIX of the Social Security Act provides for a program of medical assistance to certain low-income individuals and families.

True

Todd Foley is applying for a $100,000 mortgage. He can select either a $600 monthly payment with no points or a $520 payment with two points. How many months will it take Todd to cover the cost of the discount points if he takes the lower monthly payment?

25

It is safer to use credit, since charge accounts and credit cards let you shop and travel without carrying large amounts of cash.

True

Health insurance is available from:

Correct Answer is All of them #5 1) private insurance companies. 2) Blue Cross and Blue Shield. 3) HMOs. 4) PPOs. 5) everyone listed in all of the other answers

An escrow account is designed to reduce the cost of a mortgage.

False

Buying on credit is almost always cheaper than paying cash.

False

Cash value policies may make sense for people who intend to keep the policies for only a couple of years.

False

If creditors give you no credit for payments made during the billing period, it is called the adjusted balance method.

False

No-fault insurance systems have consistently reduced the time and costs involved in settling claims.

False

Skilled nursing care beyond 100 days per benefit period is approved and covered by Medicare.

False

Medical insurance is which part of Medicare?

Part B

Which of the following would be an example of a personal and employment document?

Social Security card

A beneficiary is a person designated to receive something such as life insurance proceeds, from the insured.

True

A deed is the document that transfers ownership of the property from one person to another.

True

An asset management account combines several financial services for a single fee.

True

Consumer credit refers to the use of credit for personal needs (except a home mortgage) by individuals.

True

Credit is an arrangement to receive cash, goods, or services now and pay for them in the future.

True

Debit cards are often called bank cards, ATM cards, cash cards, and check cards.

True

Households with small children most often have the greatest need for life insurance.

True

In a participating policy, a part of the premium is refunded to the policyholder annually.

True

In addition to the Consumer Credit Counseling Service, universities, credit unions, military bases, and state and federal housing authorities sometimes provide credit counseling services.

True