FN 104

How are finance charges generally stated?

In absolute dollars.

A borrower must have a(n)_______ to qualify for a deposit-advance loan.

Checkin account

refers to the waiting phase between the time the insured individual qualifies for benefits and when the insurance carrier begins providing benefits.

Elimination period

Which of the following would NOT count as a SMART (Specific, Measurable, Attainable, Realistic, and Timely) goal?

Pay off your home equity loan as soon as possible.

Which makes up the largest portion of your FICO score?

Payment history.

If a deposit advance is not repaid by the due date, a(n)Choose your answer here check cashing charge monthly surcharge fixed interest fee overdraft fee will normally be charged.

overdraft fee

Devon purchased an investment property on October 1 last year. He financed 100% of the purchase with a $100,000 20-year loan at 6% APR. He can deduct the interest portion of his loan payments. His monthly loan payments are $716.43. How much interest will he pay throughout his 20-year loan?

$71,943.

Frank lives in California in a forested area that is prone to severe wildfires. The insurance company he wanted to insure his home and property with has refused to write a homeowners' insurance policy for his home. The probable reason that they declined to write the policy is because the risk of wildfires is

high in both severity and frequency.

Rudy and Ozlem want a cash-value life insurance policy. They are extremely risk averse and dislike volatility in their returns. Which of the following policies might be most aligned with their priorities?

Whole life insurance.

Heuristics is based on ------ experience

past

Which of the following can NOT increase your financial score?

Believing that investment safety is better than returns.

Who is at risk of bouncing a check or incurring overdraft fees?

Cathy records checks in her check register but sometimes writes checks for more than the current balance, expecting the payees to take a few days to cash the checks while subsequent deposits will cover the checks.

Credit reporting agencies maintain bankruptcy information on your credit report for how many years?

10 years.

Shadi has determined that he is going to accept a risk by keeping enough money in his emergency savings account to cover emergency medical expenses. Based on his response, he must have judged this risk to be

low severity and high frequency.

Installment loan

the borrower receives the full amount of the loan up front in a single lump sum.

Which of the following is a characteristic of a personal line of credit loan?

The borrower is given a checkbook to use for writing checks.

Abel has an automobile insurance policy with 100/300/100 coverage limits and a $1,000 deductible. He causes a multiple-car accident that results in $85,000 in property damage and sends 6 people to the hospital with medical bills of $5,000, $15,000, $25,000, $35,000, $55,000, and $60,000. How much will Abel pay out of pocket for this accident?

$1,000.

Which of the following will increase your financial capacity score?

Current ratio of 3.5.

refers to compensating individuals only up to the value of their loss.

Indemnity

Jerome is a business major in college and is thinking about how he can establish a credit score. He has just opened his first credit card. What is the minimum he must do to generate a credit score?

Make a purchase each month for at least six months.

A secured loan is backed by collateral.

Secured

Aleaha has identified the problem for which she needs to make a decision: She wants to buy a car. Her next step, based on the decision-making process, should be to

gather data to use for the decision-making process.

Harrison just received an automobile insurance quote, and it was much higher than he anticipated. Looking at the quote yourself, you suggested it could be because he

lives in a city.

Gabriel would like to complete his medical degree to become a physician and has just started his senior year in college. He should complete his degree with the next 7 years. Based on the time frame, this would be considered a(n)

long-intermediate-term goal.

Lev has purchased a car for $5,000 with the help of a $3,000 loan from the local bank. The annual percentage rate (APR) for the loan is 6.5%. How much interest will Lev pay the first month of the loan?

$16.25.

Deltora borrowed $7,000 to purchase a used car. The total amount needed to be paid includes the $7,000 borrowed, $2,400 interest, and $250 loan fees. What is the finance charge on Deltora's loan?

$2,650

Narvia purchased a used roadster with a $15,000 3-year loan at 6%. Her monthly payments are $456.33. After just one payment, an auto collector she met at a concert offered her $30,000 for the car. How much would she have to pay her lender to release the lien on the car?

$14,618.67.

Silva's credit card has an ending balance of $1,200 on October 31. The minimum payment due is $36 on November 30. He made no transactions this month. The APR is 24%. How much interest will he pay in November?

$23.67.

TJ Vargas signed the back of his checks for deposit and then lost them on the way to the bank. When he contacted the issuers of the checks to try to have them reissued, he discovered that the checks had already cleared. How could he have made a restricted endorsement to ensure that they would get deposited only into his account?

For Deposit Only (3846933720). Midwest Bank. TJ Vargas.

What is the biggest difference between monthly payments on a revolving line of credit and monthly payments on an installment loan?

Monthly payments on a revolving line of credit can vary, whereas installment loan payments tend to be fixed.

Which is an example of installment credit?

Chase Auto Finance®.

Which of the following could result in fees on a checking account?

All of the choices are correct.

Which portion of a credit report incorporates an assessment of an individual's credit liquidity?

Amount of credit.

What information is included in your credit report?

Credit inquiry history.

Bella is anxious because she never seems to know how much money she can spend. Plus, she hates the idea of ever going into debt. What form of payment might help her manage her situation better?

Debit card.

Hyungsoo wants to keep $220,000 in deposits federally insured. What is the simplest way to accomplish this?

Deposit the entire $220,000 in one account at a federally insured bank

How is the "interest due amount" calculated for a monthly credit card bill?

Divide APR by 365 days, multiply that percent by the number of days in the billing month, and then multiply that percent by the outstanding balance.

Phil needs $500,000 in life insurance coverage for the next 20 years. While he is currently healthy, he is already in his 50s. Of the following, which is the most affordable life insurance option for him over the next 20 years?

Level term insurance.

LendingClub would be considered which type of personal loan?

Peer-to-peer

Micala is debating between two long-term care insurance policies. Policy A has a 90-day elimination period and annual premiums of $2,500. Policy B has a 180-day elimination period and annual premiums of $2,000. Micala expects the daily cost of long-term care to be $195. If she currently has no emergency savings, which policy do you recommend and why?

Policy A; its higher premium is offset by $17,550 in additional coverage.

Koren has no savings, spends her money as quickly as she earns it, and lives for today. How would you describe Koren's time perspective?

Present fatalistic.

How does the tenure of a particular account affect your credit score?

The longer you have an account, the better your credit score.

The Nguyens' only daughter (age 19) is a full-time student living in campus housing. Can they still claim her as a dependent?

Yes, as long as they continue to provide over 50% of her support.

Morty has just purchased a home at a cost of $235,000. Morty pays $35,000 down on the home. Will he be required to purchase primary mortgage insurance (PMI)?

Yes, because he made a down payment of less than 20%.

Garrett and Chris were recently involved in a car accident. Neither driver admits fault, so the case is going before a judge. Garrett has $10,000 in medical bills and $15,000 in property damage. In contrast, Chris has $25,000 in medical bills and $30,000 in property damage. Ignoring any fines or punitive judgments, use the following table to compare the total financial risk of each driver.

Garrett has $35,500 at risk, while Chris has $21,000 at risk.

After a meeting with her financial advisor, Mary Kelly learned her risk-management strategies are totally off. Which of the following changes would be advisable according to the risk matrix?

Stop accepting and start transferring the risk of cancer.

Isabelle tells you she isn't worried about planning for long-term care. "If I need to go to a nursing home, the government will just step in and pay." While it's true that some government programs can help pay for long-term care, they generally require that a person

is in poverty.

The average fee amount for an installment loan is

$0

The average fee amount for a payday loan is _____ $100 borrowed

$15

Oliver's employer will pay 50% of his long-term disability insurance premiums, if he elects this coverage. If he is healthy, in a low-risk job, and makes $120,000 a year, how much would Oliver expect to pay for coverage?

$390. To calculate the coverage needed take Oliver's salary of $120,000 × 0.65 (65%) = $78,000. The annual cost would be 1% of that ($78,000 × 0.01 = $780). If his employer is paying half, Oliver would have to pay $390 ($780 ÷ 2).

Jan needs some cash and is trying to figure out how much she can take from an ATM. She updates her check register regularly and it currently shows a balance of $615. Using her phone, she checks her account balance: $600. And she's holding a birthday check from her grandmother for $35. At this moment, what is the maximum Jan could safely withdraw while avoiding overdrawing her account?

$600

Deb and Aiko are ideal candidates for long-term care insurance. Their annual income is high enough to afford premiums, they have an estate they'd like to protect, and they're about ____________ years old.

50

Credit reporting agencies maintain negative information (excluding bankruptcy) on your credit report for how many years?

7 years

Which organization maintains housing and credit files on consumers?

A credit bureau.

What do all installment loan lenders disclose to credit applicants?

Any finance charge expressed in dollars.

Which of the following would NOT count as a SMART (Specific, Measurable, Attainable, Realistic, and Timely) goal?

Attend a good college and then earn a lot of money.

A couple has $720,000 in total savings. They want to ensure that all their funds are insured by the Federal Deposit Insurance Corporation (FDIC). Which strategy would accomplish this?

Divide it equally into two joint deposit accounts at different federally insured banks.

How often do lenders update information that is used to calculate your credit score?

Every time a credit application is processed.

Which of the following financial aid awards would be best for a student who has financial need, does not want to take out a loan, and does not want school-based employment?

Federal grant.

Which of the following can potentially increase your financial score?

Feeling as though you have control over the things that happen to you.

Which of the following has an APR of 511% for a 14 day loan?

Lender charges $40 for $200 borrowed.

What feature of a check identifies the bank that holds the account of the check?

Routing number.

Willie is looking to purchase the new limited special edition Ford Mustang. He needs a loan, but he is reluctant to shop around to many banks because his brother told him that multiple inquiries will lower his credit score. What should Willie do?

Survey as many banks as possible and apply for any loans that seem like a good deal within a 14-day window.

Which of the following lines correctly compares an HSA with an FSA?

The entire balance of a health savings account may be rolled over each year. In contrast, only $500 of the balance in a flex spending account may be rolled over.

Marie is looking for a financial adviser to assist her in making investment decisions. Which factor should NOT be used to determine which adviser to hire?

The least expensive adviser.

Eleanor recently qualified for long-term care insurance benefits. She is now waiting 3 months for her insurer to start paying for her care. During this waiting phase, she is said to be in the

elimination period.

Russell has just learned that life expectancy is expected to increase substantially in the coming decades. Based on this knowledge, he's decided to purchase a long-term care insurance policy with a

longer benefit period.

Banks and credit unions are examples of

mainstream financial systems.

Amir is researching loans offers. When he compared a loan from a bank or credit union to a payday loan, he found the payday loan

requires the borrower to write a check to the lender.

McKenzie just bought her first car, a 10-year-old sedan, for $3,000 in cash. Because her car is so old and inexpensive, she elected to only purchase the optional

uninsured/underinsured motorist coverage.

You're trying to convince your friend Jay that he should purchase a long-term disability insurance policy. "That's a waste of money," he says, "I already have worker's compensation coverage." You might reply,

"Worker's compensation only covers you if you're injured at work."

Mia went to the doctor. Mia's health insurance has a $1,000 deductible. It also has a $20 co-payment per visit. This is the first time Mia has used her health insurance this year. The office visit is $145. Mia must pay -------- out of pocket.

$145

Samuel wants to purchase a car. He reviewed his budget and can comfortably afford a car payment of $575 per month. He has good credit and anticipated being able to secure a 5-year loan at 2.5% interest. How much car loan can Samuel get for the $575 payment?

$32,399.

Lorina is allowed to open an FSA through her employer. Outside of a few prescriptions and doctors' checkups, she doesn't have many medical expenses. If she's unable to spend all the money in her FSA, how much could she roll over into the next year?

$500.

Beverly has a long-term care policy that pays 80% of long-term care expenses and has a 3-month elimination period. On January 1st of this year, she suffers a stroke and can no longer perform two activities of daily living. If she incurs $45,000 in long-term care expenses from April 1 through the end of the year, how much will she need to pay out of pocket for those 9 months?

$9,000.

Isaiah borrowed money from his bank and is charged a 1.65% monthly interest rate with no other fees. What is Isaiah's annual percentage rate (APR) on the loan? Assume 12 equal months.

19.8%.

For a loan with an APR of 50.4%, what would be the interest rate charged every 30-day payment period?

4.2%.

What is the APR for a loan that charges 3.6% every 30-day payment period?

43.2%.

Of the following choices, which will have the lowest monthly mortgage payment?

A 30-year mortgage with 20% down.

ensures that your policy premiums will be paid if you were to become disabled.

Disability premium waiver

Which of the following is an ADL?

Eating food by yourself. All of the choices are correct. Fixing your own food. Dressing yourself. alll of them

What is the most widely used credit scoring agency?

FICO.

Xavier failed to make loan payments, and the court ordered his employer to pay a portion of his wages directly to the creditor. What does this example represent?

Garnished wages

Jorge and Alana want to keep their savings of $320,000 FDIC insured. Which strategy would fail to accomplish this?

Keep $250,000 in a joint deposit account and invest $70,000 in a money market mutual fund at the same federally insured bank.

If the severity of risk is high and frequency of the risk event occurring is high, the appropriate action is to

avoid the risk.

specifies the maximum amount the policy will pay.

benefit limit

refers to a cost-sharing amount with the insurance company.

copayment

Mainstream lenders include

credit unions.

Your financial plan is a

flexible financial roadmap.

is used to transfer risk of loss to another party.

insurance

Americans are living longer and relying more on long-term care than ever before. You might take advantage of these trends because of

new job opportunities for caregivers.

When calculating your taxable income, you must choose between

the standard deduction and itemized deductions.

How quickly and easily you can access cash is referred to as

liquidity

Katrina is considering obtaining a payday loan. If she borrows $400, what amount of fee would she pay based on the average fee charged for payday loans?

$60.

Which event can have a positive effect on your credit report?

Taking out a student loan.

Which of the following correctly illustrates the principle of indemnity?

Uma's $200,000 home was destroyed in a fire; her insurance paid her $200,000.

Rosy ran into a tree and has a $15,000 repair bill. The only way her insurance will pay for these repairs is if she has

collision coverage.

Based on research conducted by the Federal Reserve Survey of Consumer Finances, Choose your answer here 15% 35% 55% 75% of consumers aged 18 and older have a credit card.

75

Evaluate the following information and help Adalyn and Tyson choose the car with the LOWEST cost of ownership. Calculate the following information for each option to help you complete the evaluation:

A four-door sedan with a cost of $27,000, interest rate of 1.2%, 36-month loan, $118 monthly insurance, $105 monthly gas.

Amelia is considering the different options for purchasing a vehicle. Of the following options listed, which one would provide the LOWEST total monthly cost for Amelia? Note you must use a financial calculator to answer this question.

A four-door sedan with a cost of $27,000, interest rate of 2.5%, 48-month loan, $120 monthly insurance, $115 monthly gas.

Erica and Stan are looking for a new apartment. Which of the following should they check on before signing a lease?

All of the choices are correct.

Reggie got a summer job as a life guard and is looking forward to going to college full-time this fall. She wants to save her earnings as she will not be able to work at school and wants to open a checking account before she starts college. She is very adept in technology and covets her smartphone. Which bank account would be appropriate for her?

Bank W has no minimum balance requirement for unlimited electronic banking, bank checks, debit card, and ATM access. No personal checks or paper statements are provided.

Buck and Narong are each purchasing long-term care insurance. They're trying to balance the costs and benefits of a variety of riders. Based on the table below, who would benefit most from an inflation rider and a shorter elimination period?

Buck would benefit most from an inflation rider and a shorter elimination period.

A personal check issued by a bank that guarantees the amount will be paid is what type of check?

Certified check.

Lisa just started her new job after graduating from college and is shopping for cars. While shopping for auto insurance, she is surprised that Protective Insurance wants her permission to pull a credit report. Why would the insurance company want her credit history?

Credit history reveals risky or risk averse attributes of person.

Which of the following does NOT include services provided by financial advisors?

Guiding what products and services to buy.

affects your health the most.

Health behavior

If Holly pays for the health insurance of her 25-year-old daughter Naomi, which of the following statements is correct?

Holly has transferred risk to the health insurance company.

Motie has a decision to make and would like to use heuristics to help him with the decision. Which of the following is the first step that Motie should make when using heuristics for the decision?

Identify the problem or issue for which a decision needs to be made.

Karen is planning to purchase an apartment in six months when her current lease expires. She is looking at ways to improve her credit score. Which strategy will help her toward this goal?

Increase limits on existing credit accounts if a new application is not required.

Sandy plans to save $163.50 a month for the next 2 years, so she can buy a $20,000 car with a 20% down payment. Although she has a higher risk tolerance, she is only earning 2% APY in her savings account. For this plan to work, what does she need to accomplish?

Keep her emergency savings in a safe and secure account.

Debra, age 68, has very low income and very few financial assets, and her employer does not provide health insurance. Where, if anywhere, is she most likely to find healthcare coverage?

Medicare.

Yolanda currently earns $3,200 per month. She has the following monthly debt payment expenses: $150 for credit cards, $290 for student loans, and a $340 car payment. She is looking to buy a house. The monthly mortgage, including principal, insurance, and taxes, is $1,000. Does Yolanda meet the FHA housing total fixed payments-to-income ratio guideline?

No, because her ratio is greater than 43%.

Maxine, age 42, has a history of health issues that have drained her savings. Tracy, in contrast, is 50 and relatively healthy. She also maintains an emergency fund that includes about 6 months of living expenses. Based on this information, which statement below accurately compares their disability insurance needs?

Only Maxine is a good candidate for short-term disability insurance.

Spiderman received a reward check for stopping a robbery. He wants to cash the check but does not have a valid ID and needs to remain anonymous. How can the check be written to best accommodate Spiderman?

Payable to "Cash".

Ye Joon wants to purchase a car someday soon. Which of the following would be a SMART goal for Ye Joon?

Purchase a gray, 2019 Ford® Fusion by November 5, 2019, for $22,840 by saving $500 per month for the down payment and financing the remaining balance.

Which tool does NOT measure your financial capacity?

Risk tolerance.

A homeowner should purchase insurance to cover which of the following perils?

Roof damage from hail.

Which of the following would count as a SMART (Specific, Measurable, Attainable, Realistic, and Timely) goal?

Save $1,000 before next spring vacation to attend spring break in Florida.

Henrietta has just purchased a new television for $600. The manufacturer has included a warranty for 1 year and provided the option to purchase another in 3 years for $150. If you were her financial advisor, what would you recommend?

She should accept the risk of her TV breaking after the 1st year.

The creation of a lifetime financial plan follows a process that starts with a goal and ends with formalizing and implementing your financial plan. What are the proper steps in this process?

Starting point, financial score, financial capacity, realistic time horizon.

What type of loan has an interest rate that fluctuates based on economic factors?

Variable installment loan.

How will having a credit score of 775 impact your application for new credit?

You will likely be approved and receive the best borrowing terms.

Why is it important to reconcile your personal check register against the bank's official paper statement or online statement?

Your available balance depends on the timing of debits and credits.

You've reasoned that when it comes to breaking your smartphone screen, the severity of risk is low and frequency of the risk event occurring is high. Based on this reasoning, you should

accept the risk.

The "M" in SMART goals represents

measurable

Unsecured loans are sometimes called Choose your answer here paydaybanksignaturecash advance loans.

signature

Alex is nearly bankrupt and, in a moment of desperation, filed a false insurance claim. Besides being illegal, this false claim raises insurance rates for everyone and is a prime example of a

moral hazard.

David has been in a major car accident, and his medical bills alone are over $100,000. Unfortunately, the person responsible for the accident had a medical limit of just $50,000. David's own auto insurance will cover the gap between his bills and the other person's coverage limits if David has

uninsured/underinsured motorist coverage.

Omar and Esther are a young married couple with a combined annual income of $650,000. Having already maxed out other tax-advantaged accounts, they are considering the purchase of life insurance for its tax-advantaged properties. If they are hoping to make long-term investments within the account, the most appropriate policy is probably

variable universal life insurance.

Adnan and Lola (married filing jointly) just sold their primary residence for $950,000. They have lived there for the past 6 years. The cost basis for the home is $400,000. They have a 37% marginal tax rate. What is the tax on the sale of their home?

$10,000.

Harris received scholarships this year totaling $15,000. He has $20,000 in qualified educational expenses this year and he is in the 10% marginal tax bracket. He also earned $12,000 part-time as a tutor. How much tax will he owe from the scholarship?

$0

Zelda purchases a 20-year-term life insurance policy with a face value of $1,000,000. She must pay $20 a month to maintain coverage. Sadly, she passes away just 12 months into her term. How much will Hilda, the sole beneficiary, receive?

$1,000,000.

Kiki has decided to start contributing to her 401(k) plan at work. She will contribute 6% of her weekly salary and her company will match 4% of her salary. Calculate the total amount of contributions the company will make to the 401(k) account this year (52 weeks) if Kiki's salary is $950 per week.

$1,976.

Lilo wants to purchase a car. She reviewed her budget and can comfortably afford a car payment of $450 per month. Lilo has good credit and anticipates being able to secure a 4-year loan at 4% interest. How much car loan can she get for the $450 payment?

$19,930.

Jayesh makes $100,000 a year as a high-rise repairman (a high-risk job). Moreover, he and his family suffer from a variety of major health issues. According to the guidelines from the text, how much should Jayesh expect to pay for annual long-term disability insurance premiums?

$2,600.

Penelope has decided to start contributing to her 401(k) plan at work. She will contribute 6% of her weekly salary and her company will match 4% of her salary. Calculate the total amount of contributions Penelope will make to the 401(k) account this year (52 weeks) if her salary is $950 per week.

$2,964.

Harriet has purchased a long-term insurance policy with a 3-month elimination period and an 80% benefit limit. If she is expecting her long-term care costs to be $120,000 a year, how much of these costs will she need to cover herself in her first year of care?

$48,000.

Wilmont borrows $1,000 with an annual fixed interest rate on the loan of 12% and a loan term of 12 months. What is the periodic interest rate?

1.0%.

Serenity received a credit card offer in the mail. The credit card has an annual percentage rate of 19%. What is the monthly interest rate that will apply to any unpaid balances on this credit card? Assume 12 equal months.

1.6%.

Around what time period were checks introduced into the banking system in Europe?

1400

Roberto's credit card has a beginning balance of $7,500 on May 1. He makes no transactions in May, and the minimum payment due is $300 on May 31. The APR is 23%. If she only pays the minimum payment, how much of the payment will go toward the principal?

153.52

Harris has been researching the total cost of maintaining his checking account. He has averaged $28 in transaction fees every month for the past 3 years while maintaining an average balance of $1,400. Approximately what annual interest rate would his bank have to pay for him to essentially break-even?

24%

A recent survey of U.S. households asked if they could come up with $2,000 for an unexpected expense. What percent said that they were probably or certainly not able to come up with $2,000 in an emergency?

50%.

Kirsten has a federal student loan and has just finished school. How soon will Kirsten have to start repaying the loan?

6 months

Riku and Sam are a married couple. They're concerned about long-term care costs and sought quotes for long-term care insurance. Despite their middle-class income, at their shared age of , they found long-term care insurance premiums to be too expensive for their budget.

70

The insured individual must meet the___________ before the health insurance company will contribute any funds to pay the medical bills.

A deductible

Grayson is looking for a new apartment. What should he do to assess a rental property?

All of the choices are correct.

Sophia is struggling to balance her bills and is considering canceling some of her insurance policies. Evaluate which of the following policies she might consider canceling first.

An accident insurance policy that pays up to $25,000 for accidental injuries.

It is clear now that Orson needs long-term care. Unfortunately, he does not have long-term care insurance and cost is a major factor. Which of the following options would be most affordable to him and to his family?

An assisted-living center.

Gordon has a large holding in AT&T stock that his grandmother has been gifting him over the past three decades. The stock has grown well over the years and pays an annual dividend rate of 6.68%. Gordon looks forward to the quarterly dividends that is deposited in his checking account. Which form of electronic payment method is used by corporations that pay dividends simultaneously to millions of shareholders like Gordon?

Automated Clearing House (ACH).

Darius and Julian have both had $5,000 in medical bills this year. Now, flu season has hit; they're both sick and each is considering going to the hospital. Based on the following information about their health insurance plans, how much will each pay out-of-pocket for a $1,000 hospital visit?

Darius will pay $0 and Julian will pay $280.

Ethan has a checking account with a local bank and has had his paycheck automatically deposited into his account for the past few years. He needs to borrow $2,600 to pay for the dental work he is having performed next week. Ethan can repay the loan within the next 30 days. Which loan option would be best for Ethan?

Deposit advance.

Within the United States, what are the three primary national consumer credit bureaus?

Equifax, Experian, and Transunion.

Enrique has decided he's going to work on improving his health. Which of the following would "manage his risk" of poor health?

Exercise regularly.

Which elements of a financial plan tend to change based on your financial situation and particular financial goals?

Feelings of control and time horizon.

Which of the following is NOT one of the six elements that shapes a financial plan?

Financial strategy.

Samantha wants to deposit her paycheck, but needs to be sure that it can only be deposited into her account: 450923893485. How should she endorse the check?

For Deposit Only (450923893485), Bloomfield Savings Bank, Samantha Iyer.

Which of the following would count as a SMART (Specific, Measurable, Attainable, Realistic, and Timely) goal?

Get a job promotion to the next level, earning a $35,000 salary within the next 3 years.

Which one of the following actions is the best way to manage health risks?

Getting adequate amounts of sleep and exercise.

Margie is the property manager for a 300-unit luxury apartment building on the Hudson River in Manhattan. She has four candidates for a vacancy on a two-year lease. Which candidate would seem like the best choice?

Kerry has a 10-year student loan that matures in a year, a small balance on a credit card, has never been late on a payment, and has been employed at Presbyterian Hospital for the past 10 years.

Larry went to Great Buy Furniture to take advantage of a nine-month zero finance deal on a living room set. All he had to do was complete a quick questionnaire on a computer to get a credit determination. Who makes the credit decision?

Lender.

Sammi turned 60 years old. She realizes that based on her expected retirement at 65 years old, she will be short about $220,000 in savings to generate the necessary income that can support her current standard of living. While she closely followed her financial plan, the financial markets just didn't keep up with her expected annual returns. What are her best options?

Lengthen her time horizon and delay retirement.

Landry is an undergraduate student who is not claimed as a dependent. Which of the following may be available to Landry if he has qualified educational expenses?

Lifetime learning credit.

Raul currently earns $4,000 per month and has the following monthly debt payment expenses: $90 for credit cards, $110 for student loans, and a $280 car payment. He is looking to buy a house. The monthly mortgage, including principal, insurance, and taxes, is $1,500. Does Raul meet the FHA housing payments-to-income ratio guideline?

No, because the ratio is greater than 31%.

Stanley is no longer able to feed himself but can otherwise perform all other activities of daily living (ADL). If he needs to hire someone to help him eat, will his long-term care insurance cover any associated expenses?

No; he must be unable to perform at least two ADLs.

Amelia is debating whether to buy a single-family home or a duplex. Of the following, which correctly compares her options?

Only with the duplex will she share a wall with her neighbors.

Which of the following would be eligible for the Public Service Loan Forgiveness (PSLF) program?

Otto went straight into the police force after graduation and has served for 12 years. He has made all loan payments on time but still has a remaining balance on his loan.

Ollie will be receiving an inheritance of $15,000 and has come to you for advice. He owes $16,000 on his student loans and does not have a 401(k) plan set-up yet with his employer. He would like to know what the best option would be for his situation. The four options he is considering are listed below

Pay all $15,000 on the student loans and continue making payments on the remaining $1,000. Open a 401(k) this week through his employer and pre-commit to contributing 4% each paycheck.

All types of debt include which element?

Principal repayments.

Identify the statement that represents the most specific goal.

Retire at age 55 in California with an annual income of $85,000.

Chelsea started to receive aggressive calls from a collection agency demanding either she make full payment or that she enter into a payment arrangement. The representative said that she owes over $1,000 in cell phone bills. She explained that she does not have a cell phone from that carrier. What should she immediately do?

Retrieve her credit reports online, review all accounts, and freeze access to credit bureaus.

Which of the following adults is likely to have a financial score over 20?

Ron, a college graduate majoring in finance, saves 10% of every paycheck, monitors his credit report, and enjoys managing his sizeable portfolio of stocks.

Reginald is a 60-year-old manager who is currently earning $100,000 a year, has $850,000 in savings earning 2%, and expects $35,000 a year in Social Security at age 67. According to his financial plan, approximately 80% to 90% of his current income is required to maintain the same standard of living in retirement. He can purchase a 5% pension with $1 million in retirement. Which of the following would count as a SMART (Specific, Measurable, Attainable, Realistic, and Timely) retirement goal?

Save $150,000 over 7 years from earnings and interest income to fully retire at age 67.

Which card requires the borrower to deposit the full amount of the line of credit at the bank as collateral before the credit card is issued?

Secured MasterCard® card.

Which of the following protects investors against the loss of cash and securities held at a brokerage firm?

Securities Investor Protection Corporation (SIPC).

Tabitha and Oscar both owned very fancy guitars worth $25,000, that is, until both guitars were stolen by a serial guitar burglar. Both have homeowner's insurance and made claims on the theft. Yet only Tabitha has a personal property floater on her guitar. Based on this information, and ignoring any deductibles, how much will their policies pay?

Tabitha's policy will pay $25,000, while Oscar's will pay $2,500.

Evaluate the most cost-effective way of having a security deposit returned.

Taking a video of the rental unit on the move-in day to document its condition.

The state with the highest split limits is Wisconsin (50/100/55), while the state with the lowest limits is Florida (10/20/10). Imagine two drivers, one from each state, caused identical car accidents at the same time. As a result of this accident, three other people had medical bills of $2,000, $15,000, and $35,000. In addition, the accident caused $65,000 in property damage. Ignoring deductibles, the drivers' own bills, and any fines or settlements, how much is each responsible for paying?

The Florida driver will owe $87,000, while the Wisconsin driver will owe $10,000.

In March 2010, you purchased 1,000 shares of BP at $57 per share through your brokerage firm. Unfortunately, the following month the Deepwater Horizon drilling rig (owned by BP) exploded, and it took some time before the oil well was capped. After holding onto the stock for weeks while experts attempted to cap the well, you finally sold your shares for $30 each. Which of the following statements is correct?

The loss is a normal part of the risk inherent with investing. You have no recourse regarding your loss.

Todd and Melvin are comparing their life insurance needs. Todd earns $60,000, has a stay-at-home spouse, two young children, and a $400,000 mortgage. Melvin, in contrast, earns $150,000 and has a spouse who earns $80,000 with no children nor mortgage. Compare their life insurance needs according to a complex needs analysis and the income multiplier method.

Todd needs more life insurance according to the complex needs analysis while Melvin needs more according to the income multiplier method.

Ethel is a 75-year-old retiree with substantial net worth. She is expecting to owe millions of dollars in estate taxes. She would also like to leave a substantial endowment to a charity and inheritances to her family members. If her current life expectancy is 15 years, which policy is most appropriate for meeting her goals?

Universal life insurance.

Meghan is helping her parents understand a life insurance policy they bought 15 years ago. Neither of them can remember what kind of policy they bought, but they do have a document that outlines the policy's provisions. Complicating matters, they know they cannot afford to make next month's premium payment and are worried they will lose their policy. Based on the table below, what kind of policy do they have, and can they skip a month's payment?

Universal life insurance; yes.

A borrower must have a(n)Choose your answer here high credit score checking account automobile savings account to qualify for a deposit-advance loan.

checking account

The Federal Deposit Insurance Corporation (FDIC) covers the depositors of

commercial banks.

Tyrese is 26 years old and the single parent of three young children. He has recently lost his job and is worried about medical care. Fortunately, he can apply for Choose your answer here Medicaidlong-term care insurancehealth insuranceMedicare, a governmental comprehensive health insurance program that is designed to provide essential medical care for the neediest in society.

medicaid

A payday loan has the highest APR of the options given.

payday

A line of credit from a bank is an example of a

personal line

This year, Pamela received $30,000 in wages, $3,000 in self-employed income, and $2,000 in unemployment benefits. What is her gross income?

$35,000.

Trudy initiates a $5,000 2-year fixed-rate installment loan on November 1. Her initial monthly payment is $25 in interest and $196.60 in principal repayment. What will be the ending balance for the year end?

$4,605.82.

Kingston had $1,250 in his checking account when his debit card was stolen. A thief made $625 in purchases with the card. How much could Kingston have saved by reporting the stolen card within 2 business days rather than 3 business days before reporting the theft?

$450.

Malaysia had $750 in a checking account when the debit card was stolen. A thief made $725 in purchases with the card. How much could have been saved by reporting the stolen card immediately rather than waiting more than 60 days before reporting the theft?

$725.

Tyler was attracted to an advertisement for new Bluetooth earphones, offering zero financing for the $200 item if fully paid in 1 month. If not paid in a month, then a 24% APR will be assessed from the purchase date. What would the finance charge be if Tyler missed the deadline by a month?

$8.08.

How many days do the credit bureaus have to investigate fraud once you notify them in writing that the information is inaccurate?

30 days

Andre visits his bank and requests a check payable to his utility company. The teller creates a check payable to the utility company drawn from the bank's own account and funds are taken from his checking account. What type of check did Andre use to pay his utility?

Cashier's check.

Brendan has a history of mismanaging his checking account. If he tries to open an account at a new bank or credit union, how can the prospective bank or credit union evaluate his previous bank account history?

ChexSystems

Which statement is true about the gross income of both students given here?

Shixuan and Min both have gross incomes of $11,000.

Joe recently received a letter from his credit card issuer stating that his credit limit was reduced in half. Joe is perplexed because last month his credit score was a 790. After getting a free copy of his credit report, he notices an error and writes the credit bureau a letter. What might happen next?

The credit bureau may rule in his favor within 30 days; the derogatory mark is removed from his report.

What element(s) is/are required when you write a check?

The name of person or company that gets the money, the date, and the amount paid.

Martie just took an auto loan with a $500 monthly payment. Over time, what will happen to the parts of her payment that are principal and interest?

The part that is interest will decrease while the part that is principal will increase.

Rachel has a SMART goal to save for the next 7 years to purchase a $100,000 boat. She currently earns $125,000 a year. Her financial advisor believes that she can earn 4% APY on her account. If Rachel plans to save 10% of her monthly income every year, will that allow her to save enough for the boat in her time horizon?

Yes, she will have saved approximately $100,770.

Pat receives a letter stating that he has been pre-approved for a credit card. The letter states he would pay zero interest for six months on retail purchases, then it will revert to the standard base rate plus 8%. The 0% interest rate is a(n)

introductory rate.

Khalid's father recently passed away, leaving him with $100,000 in life insurance benefits. If Khalid is in the 37% marginal tax bracket, how much of that $100,000 will he have after tax?

$100,000.

Jorge's credit card has a beginning balance of $2,200 on August 1. He made no transactions in the month of August, and the minimum payment due is $88 on August 31. The APR is 21%. How much interest will he pay?

$39.24

Max went to the doctor. Max's health insurance has a $40 copayment per office visit, no deductible, and 90/10 coinsurance for medical expenses. This is the first time Max has used his health insurance this year. The office visit cost is $40 with $200 for other medical expenses, including lab work. The out-of-pocket cost Max must pay is

$60.

Angela hires a fee-only financial advisor to manage her portfolio which is currently worth $40,000. The advisor charges an annual fee of 1.5%. If the portfolio earns 10% in the first year, how much in fees will Angela pay? Assume the fee is paid on the portfolio value at the end of the year and is deducted from the account at that time.

$660.

Insurance, Inc. has just begun business operations. As they start to write insurance policies, they are particularly looking to insure risks that exhibit which of the following frequency and severity characteristics?

High severity and low frequency.

Bai Yang is having trouble paying her monthly automobile insurance premiums. Which of the following options would help her reduce her monthly payments?

Take public transit more often. Take a defensive driving course. Raise her credit score.

Bian just received a quote for long-term care insurance and is worried that she won't be able to afford the premium. She decides to reduce her premium by

shortening her benefit period.

Karen just received a significant inheritance and decided to pay off her two credit cards and auto loan. When should she expect to see an update to her credit score?

As soon as the creditors that she paid off close their monthly statement period.

Michael needs his car to function properly so that he can get to work. To protect against the risk of his car breaking down, which of the following is Michael's best option?

Create an emergency fund.

Max owns one car and taxis people around town as a business. He is self-employed but contracted through Zuber, an online car service. Zuber collected fees for 12,500 miles driven by Max this year. This year's IRS business-related standard mileage rate is $0.545 per mile, and Max's marginal tax rate is 24%. What is Max's total tax savings from the standard mileage rate?

$2,597.58.

Mary opened an individual checking account at an FDIC member bank and deposited a check for $600,000. How much of her deposit is protected against loss by the Federal Deposit Insurance Corporation (FDIC)?

$250,000

Karen has deposited $500,000 into her individual money market savings account. If her FDIC-insured bank were to fail, how much of her account balance is she insured for?

$250,000.

Jane received a very enticing loan offer from her bank: $5,000 5-year 2% APR installment loan. Monthly payments are $87.64. What is the total finance charge of this loan?

$258.40.

Geraldine purchased a car with a fair market value of $36,000 and currently owes $14,000. How much equity has Geraldine built since she first purchased the car?

22,000

When looking to finance a home with the best possible rate, which of the following will have the smallest negative affect on your credit score?

Applying for several mortgages at the same time.

Oscar has been to the doctor 6 times already this year for health-related problems worsened by recent weight gain, and it is only April. Which of the following would be most appropriate for him to do to improve his overall health and protect his human capital?

Begin a program of diet and exercise.

allows you to convert a cash-value policy in the future without having to provide proof of insurability.

Convertibility provision

Dante accumulated $28,000 in student loan debts while earning his degree. He is single and currently earns $30,000 per year at his job but is willing to take a different job, if necessary. Evaluate each of the options given and select the one that is best for Dante based on his circumstances.

Dante should choose the Public Service Loan Forgiveness (PSLF) program. He should find a job with a public service entity, such as an educational institution. Once he has made 120 payments on his student loans and he is still working for the public service entity after 10 years, the amount of the outstanding student loan debt may be forgiven.

Samantha has had a rough year and has spent a lot of time in local courts. Which court-related public disclosure is omitted from her credit report?

Divorce record as part of court-appointed mediation.

Cantrell is trying to select the type of car he would like to purchase. He looked at a specific model of car that his father once owned and remembers the many times the car would not crank. Cantrell decided not to purchase that same type of car due to his father's situation. Which of the following elements of a heuristic does this represent?

Experience.

Ben is comparing checking accounts from four different banks and credit unions. He is a technology expert that travels extensively and carries an average monthly balance of $15,000. He has the use of his company credit card but on average makes 5 ATMs transactions per month and always banks online. Which bank should he select?

HCCU Bank has a $5,000 minimum monthly balance to avoid all domestic transaction fees at the bank and free out-of-network ATM withdrawals. Does not provide paper statements.

Sam has had difficulty with overdraft issues. She often rushes to deposit her paycheck to pay her bills. Because of a history of bounced checks, her bank is reluctant to offer her overdraft protection. What can she do to help alleviate this issue?

Have her employer direct-deposit her paycheck.

Which of the following element assessments is adverse for your financial plan?

High feelings-of-control assessment score.

Abel has had a rough year. Which of the following events from the past year will show up as negative events on his credit report?

His late payment on a Mattress World-extended payment bill.

Omar and Suzette are trying to decide whether long-term care insurance is right for them. They both just celebrated their 75th birthdays and have very little left in their retirement savings accounts. Which of the following statements most applies to their situation?

Long-term care insurance premiums are probably too costly for them to afford.

Manuel needs to move closer to his new job. He has visited available apartments in the desired area and made notes as to the advantages and disadvantages of each apartment. Evaluate each of the following choices and determine what his next step should be based on the decision-making process.

Manuel should list the alternatives and select the one that is best for his circumstances.

Loretta is looking at ways to simplify her life and wants to automate her utility bill payments. Her utility offers a free bill payment service. How does the electric utility's online bill payment work?

She provided her checking account information to her utility , which then uses that data to remove the funds from her checking account.

Kingston obtained a loan for $1,000 to be paid back in 30 days. The lender quoted Kingston a $200 fee. Which of the following statements is correct regarding this loan?

The APR is over 240%.

Phillipe needs all of his security deposit from his old apartment back to pay bills at his new place. He is guaranteed to have some of his security deposit withheld if

damage must be repaired.

It's open enrollment for employee benefits, and Erika is trying to pick a health insurance plan. She thinks a health savings account is a good fit for her financial goals. To be eligible for a health savings account, she must also select a health insurance plan with a high

deductible.

Mee Noi has just entered a nursing home and is faced with paying $90,000 a year for care. The first 80% of these costs will come from her long-term care insurance. The remaining 20% will likely come from

her savings and investments.

Abha purchases an annual renewable term life insurance policy. Each year she renews her coverage, her premiums will

increase.

Sarah pays the premiums on a life insurance policy. According to the terms of the policy, if her wife Jessica passes away, their son Parker will receive a death benefit. Based on this arrangement, Jessica is the

insured.

Mildred has, despite her best efforts, reached the age of 60. As she ages, she finds that her healthcare

premiums and out-of-pocket expenses go up.