Week 5 Flashcards
Jason lost his ATM card and reported it missing the next day. He found that $800 had been withdrawn from his savings account. His loss is equal to:
a. $0.
b. $175.
c. $50.
d. $100.
C. $50
Loans are a liability & should be recorded on the balance sheet as:
a. original outstanding balance.
b. Current outstanding balance
c. beginning outstanding balance
d. Upcoming balance.
B. Current outstanding balance
The three parts of an individual’s balance sheet are his or her:
a. assets, expenditures, and net worth.
b. Assets, liabilities, and net worth
c. income, liabilities, and assets.
B. Assets, Liabilities, and Net Worth
The primary purpose of life insurance is to provide: *
a. Tax advantage investments
b. Financial security for dependents in event of death
c. expand business operations.
B. Financial security for dependents in event of death
To determine the amount of life insurance coverage needed for an individual, which method below would be the most accurate.
a. Needs analysis definition involves the process of identification and evaluation of needs
b. Break-even analysis: Method used to evaluate the wisdom of a financial decision by determining the length of time it will take for the cost of the decision to be recouped
A. Needs analysis definition involves the process of identification and evaluation of needs
- An employer often provides the following life insurance as a fringe benefit for their employees.
a. Credit
b. Mortgage
c. group
d. standard
C. Group
Harlem must make set premium payments on his insurance policy until he dies, and if he cancels the policy, he will receive the cash value: this plan would be which policy.
a. continuous whole life
b. Term life
c. group life
d. None of the above
A. Continuous Whole Life
The Dow Jones Industrial Average is a price-weighted measurement stock market index of _____________prominent companies listed on the stock exchange.
30
Jason and Allison’s home is valued at $120,000 with an outstanding mortgage of $75,000. If their lender is willing to provide a home equity loan of up to 75% of the equity value of the home, how much can they borrow using a home equity loan?
120,000 - 75,000 = 45,000 x .75 = 33,750
A standard homeowner’s policy will not include damage for:
a. Lightning
b.Wind
c. fire
d. Flood
D. Flood
What insurance provides coverage for a set period?
Term Insurance
In many term policies, which clause is a common provision.
a. Loss prevention clause
b. Reward clause
c. renewable clause
C. Renewable Clause
Earnest money is the sum of money that a home buyer pledges with:
a. seller to indicate the intent of purchase
b. realtor for finding a home that fit the seller budget
c. money to start the loan process
A. Seller to indicate the intent of purchase
Which of the following insurance is designed to help with nursing home or in-home care due to chronic illness :
a. Long term care
b. Medicare
C. nursing home care
d. Disability care
A. Long term care
If an insured person had Replacement-cost coverage- this would reimburse:
a. Living expenses while your home is being repaired
b. Cost of defending the person insured
c. cost of repairing or replacing damaged structures
C. Cost of repairing or replacing damaged structures
An initial amount that is not covered by a policy and must be paid by the insured.
a. copayment
b. Co-insurance
c. deductible
C. Deductible
A time delay from the date the policy is issued until benefits are activated (with disability income policy) would be referred to as:
a. Elimination period
b. Internal limit period
c. probationary period
C. Probationary Period
What is a Portfolio?
a. A list or collection of investments to meet you investment goal
b. A group of common stock investments designed for the consumer.
c. A diversification of all common and mutual funds to meet the needs of a
consumer.
A. A list or collection of investments to meet your investment goal
Which of the following types of retirement plans is becoming less common?
a. A traditional defined benefit plan
b. A cash balance plan
c. A traditional defined contribution plan
A. A traditional defined benefit plan
Bonds are issued by corporations and state, local, and federal governments so as the market interest rate decreases, the bond :
a. Maturity period decreases
b. Price increase
c. the current yield increase
B. Price Increase
Which represents Ownership in a corporation?
A. bonds
b. Real estate
c. stocks
d. commodities
C. Stocks
A $50,000/$100,000 bodily injury liability automobile policy could pay up to a total of __________ to all injured victims in one accident.
A. $70,000
b. $50,000
c. $100,000
d. $150,000
C. $100,000
The process of settling disputes between a brokerage firm and its clients:
a. Diversification
b. Portfolio tracking
c. arbitration
C. Arbitration
The higher the risk, the higher the expected return is related to which of the following:
a. Diversification
b. Compound interest
c. time value of money
d. risk
D. Risk
Lana purchased 200 shares of LLC Corporation for $200 per share. Currently, the stocks are trading at $250. Which of the following is the return on Lana’s investment in one share?
A.65%
b.45%
c.50%
d.100%
e. 25%
E. 25%
250-200 =50 250/50= 1⁄4 or 25%
Mutual funds provides:
a. Diversification of invested funds
b. A guaranteed return in spite of the market risk
c. are always issued as a tax-free return d. Are free of any hidden cost.
A. Diversification of invested funds
Under the Social Security system, which is a requirement for an individual to qualify for full retirement benefits under the Social Security system?
a. The individual must be employed in a job covered by Social Security for at least 40 quarters, or 10 years, which need not be consecutive.
b. The individual must be employed in a job covered by Social Security for at least 40 consecutive quarters, or 10 years.
c. The individual must be employed in a job covered by Social Security for at least 50 consecutive quarters, or 12.5 years.
A. The individual must be employed in a job covered by Social Security for at least 40 quarters, or 10 years, which need not be consecutive.
