New Questions 2021 (1)

What is the most important part of an insured agent's job? Convince you to buy the policy that will pay her the highest commission. Sell you the highest level of coverage available Collect premiums for the insurance contract d) Help you select the proper kind of protection within your financial boundaries.

Helping you select the proper kind of protection within hour financial boundaries.

A bond that is repaid from the income generated by the project it is designated to finance is called a... a) Savings bond b) Treasury bill c) Revenue bond d) General obligation bond

Revenue bond

Annual earnings on a $500 Certificate of Deposit earning 3% would be: a) $15.00 b) $5.00 c) $30.00 d) $500.00

a) $15.00

A drawback of paying on credit is having... a) Additional fees b) More interest on savings c) Extra money for emergencies d) Delivery charges

a) Additional fees

The question "Will you repay the loan?" relates to: a) Character b) Capacity c) Collateral d) Conditions

a) Character

A form of security to help guarantee that a creditor will be repaid is called: a) Collateral b) Dividend c) Bond d) Annuity

a) Collateral

In 1974 ERISA was passed. What does ERISA stand for? a) Employee Retirement Income Security Act b) Entity Retirement Investment Security Act c) Employee Retirement Investment Security Act d)Employer Retiring Investment Stock Act

a) Employee Retirement Income Security Act

The main purpose of taxes is to: a) Generate revenue for funding government activities b) Reduce the chances of inflation c) Create jobs d) Discourage use of certain goods and services.

a) Generate revenue for funding government activities

Of the following, which one is the most positive feature of whole life insurance for a person who wants a more structuted way to save? a) It builds cash value b) It is permanent life insurance c) You must pay interest on any loans. d) It is more expensive than term insurance

a) It builds cash value

A credit card is a type of: a) Loan/borrowing b) Cash account c) Trust d) Checking Account

a) Loan/borrowing

Julian's annual contributions to his retirement are not tax-deductible, but his earnings accumulate tax-free. He is investing in a: a) Roth IRA b) Spousal IRA c) Regular IRA d) 401(k) plan

a) Roth IRA

The largest financial advisers are monitored by the... a) Securities and Exchange Commission b) Chartered Financial Consultants c) Harvard Business Review d) Survey of Current Business

a) Securities and Exchange Commision

A family with $45,000 in assets and $22,000 of liabilities would have a net worth of: a) $45,000 b) $23,000 c) $22,000 d) $67,000

b) $23,000

If you have reached the upper limit of debt obligations, your debt-to-equity ratio is about: a) 0.25 b) 1 c) 0 d) 0.2

b) 1

Credit cards allow you to.... a) Spend only the amount in your account b) Borrow money for a short term c) Protect your checks from thieves d) Transfer money between accounts on-line

b) Borrow money for a short term

When you sell your shares in a mutual fund, you may receive a profit that results from an increase in value called: a) Income dividend b) Capital gain c) Mutual fund money d) Fund taxes

b) Capital gain

Coordination of benefits (COB) provision applies to: a) Combining all group and individual insurance coverages b) Combining the benefits of two insurance policies issued for a married couple c) Combining three or more disability policies issued for an individual d) Combining health insurance and disability insurance coverage

b) Combining three or more disability policies issued for a married couple

Marissa purchased $500 of stock directly from a corporation without having to use an account executive or a brokerage firm. She is using a: a) Direct investment plan b) Direct reinvestment plan c) Dollar-cost-averaging technique d) Margin technique

b) Direct reinvestment plan

When calculating federal income taxes, "gross income" includes all of the following except: a) Passive income b) Earned income credit c) Investment income d) Alimony

b) Earned income credit

If your main focus is to have your investments increase in value, you are most concerned with: a) Income b) Growth c) Market risk d) Liquidity

b) Growth

Another name for a straight term policy is: a) Conversion term b) Multiyear level term c) Decreasing term d) Renewable term

b) Multiyear level term

The purpose of the Dow Industrial Average is to_____ a) Disclose a company's assets and liabilities b) Provide statistical averages c) Describe companies' management d) Improve investment skills

b) Provide statistical averages

The Federal Deposit Insurance Corporation insures depositors against losing their money in the case of a _________. a) Lost debit card b) Stolen paycheck c) Bank failure d) Death in the family

c) Bank failure

Profit from the sale of assets such as stocks, bonds, or real estate is called... a) Investment revenue b) Tax-exempt income c) Capital gain d) Dividends

c) Capital Gain

The process in which interest is earned on both the principal and any previously earned interest is called: a) Annuity b) Budgeting c) Compounding d) Financial Planning

c) Compounding

A portion of the total cost of an item that must be paid at the time of purchase is called a(n): a) Warrant b) Dividend c) Down payment d) Annuity

c) Down payment

Money that can be accessed quickly to pay unexpected expenses is called: a) Dividends b) Investments c) Emergency Fund d) Principal

c) Emergency Fund

The type of health insurance coverage that pays for some or all of the daily costs of room and board during a hospital stay is: a) Dental expense b) Surgical expense c) Hospital expense d) Physician expense

c) Hospital expense

To maximize profit or reduce dollar losses when you sell your investments, it is important to do all of the following except: a) Keep a list of sources of information (such as internet addresses) for reference b) Identify and document commissions or fees paid c) Identify the actual dollar cost of the investments after you sell them d) Keep purchase records of actual dollar costs.

c) Identify the actual dollar cost of the investments after you sell them

The maximum amount of money a creditor will allow a credit user to borrow is called: a) Credit rating b) Open-end credit c) Line of credit d) Mortgage

c) Line of credit

Which of the following would increase the interest rate for a loan? a) High down payment b) Short time to maturity c) Poor credit rating d) Lower consumer prices

c) Poor credit rating

A corporation gets its equity capital from its... a) Sole proprietor b) Partners c) Stockholders d) Professional managers

c) Stockholders

A demand deposit is also known as: a) A savings account b) A trust c) A loan d) A checking account

d) A checking account

To survive a crisis, you can take the following steps: a) Monitor the value of your investment and retirement accounts b) Establish a larger than usual emergency fund c) Know what you owe and reduce your spending d) All of the above

d) All of the above

While evaluating alternatives, all of the following are appropriate questions you could ask before making a major purchase except: a) Is it possible to delay the purchase or to do without the item? b) How do the price, quality, and service compare at different stores? c) Which brands should I consider? d) All of these are questions that should be asked.

d) All of these are questions that should be asked.

Which of the following illustrates an insolvent situation? (Insolvent means you can't pay your debts.) a) Assets $56,000; annual expenses $60,000 b) Assets $78,000; net worth $22,000 c) Liabilities $45,000; net worth $6000 d) Assets $40,000; liabilities $45,000

d) Assets $40,000; liabilities $45,000

Which of the following are often purchased using price negotiation? a) Shampoos b) Swimsuits c) CD Players d) Automobiles

d) Automobiles

If overall interest rates in the economy rise, a corporate bond with a fixed interest rate will generally a) Become worthless b) Increase in value c) Be returned to the corporation d) Decrease in value

d) Decrease in value

Why of if the following risks reduces hour purchasing power? a) Stock risk b) Business failure risk c) Market risk d) Inflation risk

d) Inflation risk