GP

Question 1

Features of series EE/I bond

Answer 1

• special savings bond through which an exclusion from taxation on interest is available when used for qualifying educational expenses
• must be owned by parent
• max series EE is 10,000 per year per owner. Maximum series I is 10,000 digital and 5000 paper per year per owner.
• qualifying expenses are tuition and fees
• phase out exist for interest exclusion
• counted as an asset of bond owner for FAFSA
• no penalty if not use for qualifying expenses, but interest will be included in income

Question 2

Consumer credit protection act

Answer 2

Right to know costs and terms of credit

Question 3

Equal credit protection act

Answer 3

Right to fair opportunity to obtain credit

Question 4

Fair credit reporting act

Answer 4

Right to know what’s in your credit file

Question 5

Fair credit billing act

Answer 5

Right to have billing mistakes resolved

Question 6

Fair debt collection practices act

Answer 6

Right to be protected from collection agencies

Question 7

What is still required to be paid back under Ch 7 bankruptcy?

Answer 7

Alimony, child support, taxes (less than 3 yrs past due), secured debt, student loans

Question 8

Max debt levels for Ch 13 Bankruptcy

Answer 8

$419,275 unsecured
$1,257,850 secured

Question 9

What is considered a jumbo mortgage?

Answer 9

Amounts over $766,850 (2024)

Question 10

Series EE/I tax free interest calculation if only part of the proceeds are used for qualified expenses

Answer 10

Total IR x (Adjusted qualified education expense / proceeds)

Question 11

AOTC credit amount

Answer 11

2500
100% first 2000
25% next 2000
1000 refundable

Question 12

LLC max amount

Answer 12

2000
20% first 10,000 expenses (tuition + fees ONLY)
Non refundable

Question 13

What applies for UGMA/UTMA?

Answer 13

Kiddie tax rules

Question 14

Qualified education expense withdrawal from ROTH or Traditional IRA

Answer 14

10% penalty waived

For Roth: income tax may still be applied if pre 5 year + 59 1/2

Question 15

Contributions to coverdell

Answer 15

Up to age 18, use by 30
$2k per year per bene

Question 16

Penalty for Coverdell or 529 non qualified withdrawal

Answer 16

10% + taxes

Question 17

Consumer debt ratio

Answer 17

<20%
Total monthly consumer debt (non housing) / monthly NET household income

Question 18

EFC asset/income amounts

Answer 18

Parent assets: 5.64% (home equity/retirement don’t count)
Parent income: 22-47% (AGI minus allowance for taxes and living expenses)
Student assets: 20%
Student income: 50% (above protected amount of $9410 for 2024)

Question 19

Return on equity

Answer 19

EAT/equity

Question 20

Debt to equity

Answer 20

Total long term debt/equity

Question 21

Times interest earned

Answer 21

EBIT/interest expense

Question 22

Debt ratio

Answer 22

Total debt/total assets

Question 23

Front end/mortgage ratio

Answer 23

PITI/gross monthly income
Goal is 28% or lower

Question 24

Back end ratio

Answer 24

PITI + other debt/gross monthly income
Goal is 36% or lower

Question 25

Quick ratio

Answer 25

Current assets - inventories / current liabilities

Question 26

Working Capital

Answer 26

Current assets - current liabilities

Question 27

Inventory turnover

Answer 27

COGS/average inventory

Question 28

Days to sell inventory

Answer 28

365/inventory turnover

Question 29

Days to sell inventory

Answer 29

365/inventory turnover

Question 30

Illiquid personal assets on a balance sheet

Answer 30

The fair market value is the last price that was paid for the asset until an appraisal or a new transaction price can be obtained, do not fall into the unknown value trap

Question 31

Acceptable emergency fund assets

Answer 31

Cash
Checking and savings accounts
Money market mutual funds
T-bills
CDs
Cash value life insurance
Lines of credit
Home equity loans

Assets in the fund must be liquid and marketable

Question 32

How to decide between a fixed rate or a variable rate mortgage?

Answer 32

• when rates are low and/or the homeowner is expected to stay in the home for a long time —>fixed rate is advisable
• when rates are high and/or the homeowner is not planning to keep the home long-term —>a variable rate may make sense

Question 33

Credit score rating categories

Answer 33

<580=poor, risky borrower
581-669=fair, many lenders will approve loans
670-739=good, most lenders consider a good score
740-799=very good, dependable borrower
800+=excellent

Question 34

How FICO scores are calculated

Answer 34

Payment history 35%
Amounts owed 30%
Length of credit history 15%
Credit mix 10%
New credit 10%

Question 35

529 Able Plans

Answer 35

• diagnosis of significant disability prior to age 26
• condition expected to last 12 consecutive months
• receipt of SSI or SSDI or able to obtain disability certification from a DR

Question 36

How long does a respondent have to deliver a written answer to an amended complaint?

Answer 36

No later than 14 days of delivery of the amended complaint or the date an answer to the original complaint was due

Question 37

What is the long end of the yield curve reflective of?

Answer 37

Market rate and anticipated economic conditions

Question 38

When the yield curve is inverted

Answer 38

Long term investors will settle for a lower yield due to the outlook that the economic conditions are bleak

Question 39

LLC: can multiple household members qualify?

Answer 39

Yes, each eligible household members qualified ed expenses may be combined to maximize the credit up to the annual limit of $2k per return (20% on the first $10k of qualified education expense)

Question 40

Does Ch 7 bankruptcy eliminate mortgage debt?

Answer 40

Yes, Ch 7 bankruptcy can eliminate your personal responsibility to repay mortgage debt but the lender retains a lien on the property and can foreclose if payments stop

Question 41

Suspension time frame

Answer 41

Not less than 90 days or greater than 5 years

Question 42

Framing bias

Answer 42

Occurs when people decide based on how information is presented as opposed to just on the facts themselves

Question 43

Dunning Kruger Effect

Answer 43

Occurs when a persons lack of knowledge and skills in a certain area causes them to overestimate their competence