I Don't Know It Flashcards
What is the arbitrage pricing theory (ABT)?
A multi-factor asset pricing model based on the idea that an asset’s returns can be predicted using the linear relationship between the asset’s expected return and a number of macroeconomic variables that capture systematic risk
When must a Report of Foreign Bank and Financial Accounts (FBAR) be submitted? (And by default, a form 114)
When the aggregate value of all foreign asset accounts exceeds $10k
What are the MFJ foreign asset thresholds for filing Form 8938?
$100k on last day of year or $150k at any time during the year
Disposition
Seeks to confirm pride and avoids regret
Sells winners too fast to prove correct
Holds losers too long to avoid admitting incorrect
What do you do with P.S. 58 payments?
It should be in a qualified plan that contains life insurance. It is subtracted from the cash value (tax-free) amount of the qualified plan
What are the 3 non-exceptions for qualified plan early withdrawals (HHH)?
Homebuyer
Heathcare
Higher edcuation
What is the one non-exception for trad IRA and IRA-funded plans?
Separation of service before age 55
What are the 4 home coverages (A-D)?
A - home coverage amount
B - detached structures, usually 10% of A
C- contents, usually 50% of A
D - loss of use, usually 20% of A
What is the coinsurance clause formula for paying for damages?
.8 * replacement value = coinsurance req
(Coverage A / coin req ^) * damage cost - deductible = insurance payment
What is the formula for determining stop loss?
Calculate the stop-loss limit on a health insurance policy with the following information:
$1,500 deductible
80/20 coinsurance
$17,500 maximum-out-of-pocket limit
(MOOP - Deductible) ÷ Insured’s Coinsurance Percentage
($17,500 - $1,500) ÷ 0.20 = $80,000
What is the insurable loss called?
The peril
What is chpt 11 bankruptcy?
Intended for businesses but also accommodates those who exceed chpt 13 limits
What are liquidity ratios?
Used to determine the ability to meet short-term obligations
-Current ratio
-Quick ratio
-Working capital
What are activity ratios?
Used to determine the relative efficiency of financial management
-Inventory turnover
-Days to sell inventory
-Acct’s receivable turnover
-Receivable collection period
What are profitability ratios?
Used to measure relative profitability
-Gross profit margin
-Operating profit margin
-Return on Assets
-Return on Equity
What are debt ratios?
Used to determine the ability to meet long-term obligations
-Debt to equity
-Times interest earned
-Debt ratio
What are the 5 categories and their percentages of weight for a credit score?
Payment history (35%)
Accounts owed (30%)
Length of credit history (15%)
New credit (10%)
Credit mix (10%)
What is PITI?
Principle
Interest
Taxes
Insurance
Which optional feature of an individual disability income insurance policy allows for a larger amount of additional coverage to be added to a policy at a specified age, after a specified number of years, or at after specific life event, such as marriage?
Guaranteed Insurability Option
Automatic Benefit Increase
Cost-of-Living Adjustment
Principal Sum Benefit
Guaranteed Insurability Option
What are the three forms of payments for an annuity?
Withdrawals - Partial and full
Life annuity
Annuity certain - fixed period and fixed income
According to the triple-trigger theory, identify the category of insurer whose policy was in force when the disease developed.
Exposure
Manifestation
Exposure-in-residence period
Covered perils
Exposure-in-residence period
How do you determine how much money needs to be deposited back into an account to meet margin?
Stock price * mx margin = required amount
Stock price - debt = current account value
Required amt - current value = amt to deposit
Who are related parties for the purpose of IRC 267?
Spouse
Child
Grandchild
Parent
Sibling
An entity with more than 50% ownership
How does a disallowed loss move through related party sale to unrelated party sale?
Dad sells to son at a loss
Son sells to unrelated party for a gain (realized gain/loss)
Subtract Dad’s loss from son’s gain and get son’s Recognized loss