Deck 13: Using Technology to Manage Information Lf-Test Scoring Guidelines

Question 1

Whole life insurance is insurance where some part of the money you pay goes toward pure insurance and another part goes toward savings,so you are buying both insurance and a savings plan.

Answer 1

True

Question 2

Home ownership is a wise investment.

Answer 2

True

Question 3

The first step to controlling your assets is to take an inventory of them.

Answer 3

True

Question 4

Your budget is your financial plan.

Question 5

Another name for Social Security is Old-Age,Survivors and Disability Insurance Program.

Question 6

A Keogh retirement plan is designed for those who work for the government.

Question 7

Living frugally (not participating in unnecessary spending)is easy for the average person.

Question 8

Full coverage auto insurance means that the insurance would pay for both your car and the other person's car if you hit someone else with your car.

Question 9

Mortgage payments should not amount to more than 28% of your net income.

Question 10

An IRA is a tax-deferred investment plan that enables a person to save part of his or her income for retirement.

Question 11

To take inventory of your financial assets you need to develop an income statement for yourself.

Question 12

Almost all of the U.S.population has accumulated enough money by retirement age to live comfortably.

Question 13

Insurance is a written contract between the party being insured and the insurer where the financial responsibility for losses transfers to the insurer up to a specified limit.

Question 14

A variable contract is a contract to make regular payments to a person for life or for a fixed period.

Question 15

A fixed rate home loan has a fixed interest rate,but the payment increases throughout the life of the loan.

Question 16

A contrarian approach to investing means purchasing stock when others are selling.

Question 17

Liability auto insurance means that if you hit someone else with your car,your insurance would pay to repair both cars.

Question 18

The least expensive and simplest form of life insurance is whole life insurance.

Question 19

Present value is the worth of an investment at some future point in time.

Question 20

A Roth IRA is an investment that gets tax deductions when the money is deposited in the account.

Question 21

Dave has quite a bit of money in the stock market.He finds that it is best to buy stock when everyone else is selling.Dave practices a __________ approach to investing.

Question 22

The lifetime income of families headed by individuals with a bachelor's degree is:

A) Less than $550,000
B) Close to $1 million
C) $1.667 million
D) $10 million

Question 23

Which of the following is a step to controlling your assets?

A) Take an inventory of your financial assets
B) Keep track of all of your expenses
C) Start a savings plan
D) All of the responses are correct

Question 24

An ARM mortgage has an interest rate that changes,thus the payment throughout the life of the loan will change.

Question 25

__________ insurance is pure insurance protection with no savings feature for a given number of years that typically costs less the younger you buy it.

Question 26

A co-payment is an amount paid when medical services are rendered.

Question 27

Expensive jewelry and musical instruments are often not covered under basic homeowner's insurance.Instead to cover these things you must buy a __________.

Question 28

__________ is the common name for the Old-Age,Survivors and Disability Insurance Program established in 1935.

Question 29

Which of the following statements about borrowing money is correct?

A) Borrow money for ordinary expenses such as food if you are out of cash just before the next payday
B) Save about six months of earnings for contingency purposes
C) Borrowing for things you want makes sense
D) All of the responses are correct

Question 30

An individual retirement account (IRA)allows a person to save a percentage of income,tax free.

Question 31

Less than __________ percent of the U.S.population has accumulated enough money by retirement age to live comfortably.

A) 10
B) 5
C) 2
D) 1

Question 32

The value of an investment at some future point in time is called its __________.

Question 33

A Roth IRA is an investment that does not get up-front deductions on taxes,but the earnings grow tax-free and are tax-free when they are withdrawn.

Question 34

__________ insurance means that if you hit someone else with your car,your insurance would pay to repair the damage on the other vehicle,but not your vehicle.

Question 35

__________ is a written contract between the party being insured and the insurer where the financial responsibility for losses transfers to the insurer up to a specified limit.

Question 36

When homeowner's or renter's insurance is purchased it is important to stipulate that you want guaranteed replacement cost,which will replace items,not give the depreciated value of them.

Question 37

A universal life policy is a permanent insurance plan that allows flexibility in your insurance and savings amounts.

Question 38

A(n)__________ is a contract to make regular payments to a person for life or for a fixed period.

Question 39

Once people buy a home,the payments are relatively fixed.

Question 40

Mortgage payments shouldn't amount to more than 28% of your net income.

Question 41

__________ will change significantly by the time the youth of today retire.

A) Social Security
B) Life insurance
C) 401(k) plans
D) Auto insurance

Question 42

The type of home mortgage that has a variable interest rate and thus the payment throughout the life of the loan will change is known as a(n):

A) Variable rate mortgage
B) Adjustable rate mortgage
C) 80/20 loan
D) Interest only mortgage

Question 43

Explain the type of information that is contained in a credit report.

Question 44

__________ life insurance is similar to universal life insurance except that your excess premium is invested in stocks,mutual funds or other high-yielding securities.

A) Term
B) Whole
C) Variable
D) Partial

Question 45

Health insurance is:

A) Important to protect from losses due to health problems
B) Provided by many employers
C) Likely to have a deductible
D) All of the responses are correct

Question 46

Which of the following statements about life insurance is most true?

A) Insurance needs in early years are high
B) Today, the loss of a spouse is not likely to impact the family standard of living with or without life insurance
C) The Fed supervises insurance companies to see that they have the assets to cover likely claims in any given year
D) Term life insurance is the most complex form of insurance

Question 47

__________ means that if you hit someone else with your car,your insurance would pay to repair the damage on the other vehicle,but not on your vehicle.

A) Collision insurance
B) Liability insurance
C) Uninsured motorist insurance
D) Pro-forma insurance

Question 48

__________ is the worth of an investment right now.

A) Current value
B) Present value
C) Amortized value
D) Future value

Question 49

Which of the following is an investment benefit of a home?

A) You can live in it
B) The payments are relatively fixed
C) Paying for a home is a good way to force yourself to save
D) All of the responses are correct

Question 50

__________ pays part of the cost of a long-term sickness or an accident.

A) Disability insurance
B) Term insurance
C) Liability insurance
D) Collateral insurance

Question 51

A(n)__________ mortgage has a fixed interest rate and the payment is the same throughout the life of the loan.

A) Fixed rate
B) Interest only
C) 80/20
D) Set rate

Question 52

A(n)__________ is a tax-deferred investment plan that enables a person to save part of his or her income for retirement.

A) IRA
B) PDA
C) AME
D) SSE

Question 53

A(n)__________ is the amount that must be spent on health care before insurance companies will cover the remaining expenses.

A) Reserve
B) Deductible
C) Annuity
D) Co-payment

Question 54

A(n)__________ is a contract to make regular payments to a person for life or for a fixed period.

A) Income stream
B) Annuity
C) Allowance
D) Pension stream

Question 55

The least expensive and simplest form of life insurance is:

A) Term
B) Whole
C) Partial
D) Universal

Question 56

List and explain the six steps to controlling your assets.

Question 57

The Social Security money individuals receive when they retire comes directly from

A) The government Social Security trust fund
B) State taxes
C) The Social Security taxes being paid by others
D) The Social Security taxes the individuals are paying who are retiring

Question 58

Which of the following statements about IRA accounts is true?

A) An IRA is a taxable investment plan that enables a person to save part of his or her income for retirement
B) Current income taxes are paid on IRA deposits
C) The benefit of an IRA is that invested money is not taxed
D) IRA earnings are not taxed as income when they are withdrawn

Question 59

Explain the reasons why credit cards are an important element in a personal financial system,even if the rise person rarely uses them.

Question 60

A(n)__________ plan is a savings plan that allows people to deposit pretax dollars and whose earning compound tax free until withdrawal,when the money is taxed at ordinary income tax rates.

A) 401(k)
B) 503(b)
C) Roth
D) Pension

Question 61

Explain the difference between term,whole life and universal life insurance.

Question 62

Discuss the difference between a will and a power of attorney.