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Per Finc

Final Exam

Question	Answer
The standard of living is defined as the necessities, comforts, and luxuries desired by an individual or group.	True
The cost of raising a child from birth to age 18 is now more than $300,000.	True
A good financial plan completed when one is in their 30s will typically last a lifetime.	False
Financial planning is a continuing, life-long process.	True
Financial planning can improve your standard of living.	True
Your auto loan payments would be listed as a liability on the balance sheet.	False
Only the current month's payment on your mortgage loans would be listed on the balance sheet as a liability.	False
Inability to reach short-term goals will significantly affect your ability to reach long-term goals.	True
As a single taxpayer with no dependents, one is generally eligible to file as "head of household."	False
Kelly and Sam got married December 30. Since they were single for most of the year, they can legally file as single taxpayers in the year of the wedding.	False
George and Maria were divorced September 29, have no remarried, and have no dependents. Their filing status for the year will each be "single".	True
EFTS allow you to make payments that occur on a regular basis.	True
Convenience and improved record keeping are two advantages sited for on-line bill payment.	True
It is probably advisable to purchase life insurance from a company that has been in business for at least 25 years.	True
One should be concerned about unethical sales practices when promises are made that premiums will vanish in 3 or 4 years.	True
Life insurance cash value may be collected by terminating the policy	True
Life insurance cash value may be borrowed from the insurer at a low interest rate if the policy owner can pass an easy credit check.	False
Cash value is an important component of whole life, universal life, and variable life but is never a component of term insurance.	True
Cash value will not be forfeited to the insurance company for non-payment of a premium, but will instead always accrue to the benefit of the policy owner.	True
Life insurance premiums are generally tax deductible.	False
A personal liability umbrella policy typically includes coverage for auto related liability losses in excess of the limits purchased in a personal auto policy.	True
The personal liability umbrella policy typically includes coverage for liability losses that are in excess of the limits purchased in the comprehensive personal liability coverage provided in the homeowners' policy.	True
The minimum limit for personal umbrella policies is generally $100,000.	False
A captive agent represents one insurance company.	True
One should never admit fault at the scene of an accident.	True
Uninsured motorist coverage covers passengers in your car from losses caused by your negligence.	False
Investing is considered a short term activity that involves the buying and selling of activities.	False
Investing requires a fairly large sum such as $5,000 to get started?	False
The over the counter market is NOT an organized security exchange.	True
Low price/earning rations indicate limited or low investor confidence.	True
A stocks Beta is an indication of its expected annual yield.	False
An open-end investment company is commonly known as a mutual fund.	True
The price an investor can sell his shares of an open-end mutual fund share is the net asset value.	True
Reduced early retirement benefits can be received at age 62.	True
The current trend in the retirement plans is towards contributory.	True
Personal finance management is important because it...	makes personal financial goals easier to achieve.
Financial planning can help us to...	spend wisely.
The last step in the financial planning process is to...	redefine goals and revise plans and strategies as personal circumstances change.
Over 75% of the revenue received by the federal government is from _______ and ________ taxes.	income and Social Security.
The federal income tax is...	flat rate.
If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 90%, then the borrower must make...	a minimum down payment of $10,000 plus closing costs.
If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 80%, then the borrower must make a down payment of at least...	$20,000
If you made a down payment of $11,000 on a $110,000 house, the lender no doubt will require ________ as a result of the size of the down payment.	mortgage insurance.
A professional basketball player severely injured his hamstring and can't play basketball for 9 months. Assuming he accumulated enough "quarters of coverage" for eligibility, how many months will he receive Social Security disability income insurance?	0
Most people do NOT need protection against...	a specific dread disease
Which of the following programs is a public assistance program that provides health insurance benefits only to those who are unable to pay for healthcare?	Medicaid
Which of the following best approximates the length of the average nursing home stay?	2.5 years
Joe has a disability income policy that pays a monthly benefit of $1,200. Joe has been disabled for 30 days, but he only received a check in the amount of $600 from his disability insurance. What is probably the reason that he only received $600?	The elimination period is 15 days.
What is a reason for preferring to rent rather than to buy?	Mobility, no maintenance worries, lower monthly cash flows, and down payment money better used elsewhere.
Generally, renting would be preferred to buying when...	you have no money to make a down payment, you know your job will be temporary, or you have just gone through a divorce.
In order to find out all of the homes that are available for sale in a particular area you should consult...	the Multiple Listing Service.
A real estate sales contract will include...	the amount you are willing to pay for the property.
Earnest money is the sum of money the home buyer deposits with the...	seller to indicate intent of purchase.
The most popular mortgage loan for financing a home purchase is a...	conventional fixed-rate loan.
Interest rates will be lower on your (savings OR checking) accounts.	Checking
Liquid assets would include your savings account and you (money market deposit account OR stock mutual fund).	Money market deposit account
Today the differences between a commercial bank and an s&L are (minor OR major).	Minor
Credit unions are more likely to be paying (much OR slightly) higher interest rates on their accounts than a commercial bank.	Slightly

Created by: j.walters on 2011-02-24

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Per Finc

Final Exam