Final Flashcards
Difference between Actual Cash Value policy and Replacement Cost Value policy
Actual: reimburses you for amount you would receive from Craigslist
Replacement: gives you full amount of item you purchased
Give an example of “moral hazard” in automobile insurance or homeowners insurance.
Driving carelessly because you are insured. Parking your car where it might be stolen, Not controlling a dog who might bite (homeowners), not fixing a broken step or walkway (homeowners), etc
Give an example of a correlated risk that is hard for insurance companies to diversify.
Earthquakes, floods, hurricanes, epidemics, wild fires, etc
If interest is compounded daily, which of these is the lowest? (check one)
APY ,APR , EAR
a. ___ APY (Annual Percentage Yield)
b. X APR (Annual Percentage Rate)
c. ___ EAR (Effective Annual Rate)
The Strong Interest Inventory uses John Holland’s six basic personality types. Each type has a single word name. List three of these names:
Realistic, conventional, investigative, enterprising, artistic, social
The three principal markets for health insurance in the U.S. are:
Government
Employer based group
Individual / Self-purchase
Employer contributions to employee health insurance are usually
Untaxed
Which would usually save the most in auto insurance premiums:
Lower the collision and comprehensive deductible from $1,000 to $250
Increase the collision and comprehensive deductible from $250 to $1,000
Decrease the liability coverage from 100/300/100 to 50/100/5
Increase the collision and comprehensive deductible from $250 to $1,000
Which of the following is a larger component of your credit score? (check one)
The length of your credit history
Credit limits versus how much you owe
Recent credit applications
The length of your credit history
Which of the following forms of debt have grown the most in the US in the last 10 years? (check one) Home equity loans Credit card debt Student loans Automobile loans
Student loans
Of the following, which group is least likely to default on student loans? (check one)
Graduates of 4-year public universities
Students who don’t graduate
Students who attend for profit schools
Graduates of 4-year public universities
Which of the following types of debt can usually be discharged (i.e., gotten rid of) in Chapter 7 bankruptcy? (check all that apply) Alimony payments Unpaid taxes Unpaid medical bills Student debt
Unpaid medical bills
What are the types of income taxes?
Federal
State
Local `
What are Payroll taxes? (FICA)
Social Security
Medicare
What are taxes?
Add up your income and give portion of that to government
Marginal tax rate
rate that applies to last dollar earned
Average tax rate on taxable income
total taxes paid / taxable income
Average tax rate on total income
total taxes paid / total income
What is non-taxble and taxable when it comes to Scholarships in your income?
Non= tuition and fees, books, and course Taxable= Room and board, travel
Adjustments vs. Deductions
■Allows you to still take standard deduction and get additional deduction for tuition and fees.
■Changes your AGI, which has implications for when other deductions are phased out.
■Lowers threshold for when some deductions are allowed
What is a W4, W2?
W4 – What you fill out when start new job – Filing status and exemptions
W2 – What employer gives you – Shows earnings and taxes already paid
When countries design their tax systems, they have to make some choices. Here are three possible goals:
Higher-income people pay higher tax rates than lower-income people.
Married couples who earn the same amount of money pay the same amount in taxes, no matter who earns the money.
Taxes don’t depend on whether couples are married.
Marriage Penalty
Typically occurs when both spouses earn about the same amount of money
• Brackets don’t double for married
• Standard deduction didn’t double in past
• Phaseouts are not always twice AGI
Marriage Benefits
Workplace health and pension benefits coverage
Social Security retirement and survivor benefits
Lower insurance rates
Automatic inheritance rights
Preferential estate tax treatment
