CYAF 222- Family Finance Final

Your collision coverage generally protects you when you drive all of these
Your health insurance requires that you pay $50 each time you visit the doctor’s office and $15 for each prescription drug. This is an example of​ a copayment
In order for a potential loss to be insurable it must be fortuitous and financial.
Selling shares of stock for more than you originally paid is called capital gain
Some of the least risky stocks on the market are called blue-chips stock
Sales commissions charged on term insurance policies purchased directly rather than through an agent average approximately ____ percent. 10
When no employer-sponsored retirement plan is offered, you should contribute to a(n) Roth IRA or a traditional IRA.
As a result of the health care reform Patient Protection and Affordable Health Care Act a child may stay on a parent’s health care plan until age 26
A legal document that directs life support measures, such as a respirator, to be removed is called a​ living will
Comprehensive automobile insurance protects against property damage losses caused by perils. Which one of the following is not a covered peril?​ rollover
In an average year, the price of a typical stock fluctuates up and down by about ____ percent. 50
Your collection of multiple investments in different assets chosen to meet your financial goals is your​ portfolio.
Which of the following types of insurance can be purchased only through a federal government program? flood insurance
Mutual fund investors must pay federal income taxes on all of these
A group of physicians and hospitals who have banded together to offer a health insurance contract in areas where there is no available HMO is called a​ provider-sponsored network
Which of the following life insurance applicants would pay the lowest insurance premiums? preferred
​Homeowner’s insurance includes both property coverage and liability coverage.
One’s need for life insurance is generally the greatest during which phase of the life cycle? Young married with children
The best-known defined-contribution plan is the 401(k) plan
​Interest on bonds must be paid according to the bond indenture.
At a minimum you should contribute enough into your retirement account to receive the maximum employer matching contribution.
The option that one might purchase if he or she wanted to increase the amount of cash value insurance held in the future is called guaranteed insurability
​____ funds invest in high-yield, high-risk corporate bonds. Junk bonds
Companies that consistently pay out higher than average cash dividends are classified as ____ stocks.​ income
​____ means that on termination of employment, an employee can keep his or her savings in a tax-sheltered account by transferring the retirement funds from the employer’s account to another account without penalty. portability
Your preferences for funeral and burial, obituary and location of important documents can best be communicated in your letter of last instructions
A written authorization given by a shareholder to someone else to represent him or her and to vote his or her shares at the stockholders’ meeting is called​ a proxy
​____ is (are) the portion of a company’s profits that the firm pays out to its shareholders. dividends
An umbrella liability policy provides​ additional liability protection over and above any other liability insurance you carry.
​To collect Social Security retirement benefits based on a spouse’s earnings, both must be at least 62 years old
Which of the following best describes a preexisting condition?​ A previously diagnosed medical condition
____ would be classified as cyclical industries.​ airlines
A person who wants to continue health insurance coverage through your COBRA rights must​ ​take a six-month waiting period
A ____ stock is one that has little or no track record but has a potential for substantial earnings at some time in the future. speculative
To be fully insured for Social Security retirement benefits, a worker must have ____ Social Security credits. 40
​One can lower insurance premiums by doing all of the following except avoiding coinsurance
When you have a homeowner’s loss, you should not ​make permanent repairs until the insurance company has inspected the premises.
Under the Affordable Care Act, all health care plans must cover ten essential benefits of adequate coverage and be labeled as a​ quality healthcare plan
A bond represents a debt owed by a business or organization
A settlement option for a life insurance policy can be Any of these
An explanation of your investment philosophy and your logic on investing to reach specific goals is a(n)​ Investment plan
Persons who have a high-deductible health plan can make tax-sheltered deposits into an investment account called a _______ from which they can pay medical expenses.​ health savings account
​The person who receives the proceeds of a life insurance policy at the death of the person whose life is insured is the beneficiary
A(n) ____ is intended for taxpayers with self-employment income and owners of small businesses.​ SEP-IRA
An annuity purchased before retirement is typically a deferred annuity
One cannot rely on worker’s compensation to cover your health care needs because it​ covers only job-related injuries and illnesses
​Current information about mutual funds can be found at (in) all of these
The primary purpose of the Employee Retirement Income Security Act (ERISA) is to regulate employer-sponsored pension plans
You can make sure that your mutual fund account passes to your desired heir by completing a ________ when you open your account. beneficiary designation
​If you borrow funds from your employer-sponsored retirement account you must pay the money back within 30 days of changing employers
Group term life insurance would be especially beneficial for persons who have health problems
The largest final expense for most families would be funeral and burial expenses
If you want to receive periodic, regular income from your mutual fund account you would set up a systematic withdrawal plan
Employees can benefit from the appreciation in the stock in their company even if they put no money down if their employer offers​ employee stock options
​People who start saving and investing for retirement during their twenties should aim to reserve ____ percent of their pretax income every year. 12 to 15
An employer-sponsored retirement plan in which the employer or the employee puts money in a retirement account for the employee, and the amount of the retirement benefit depends on how well the investment yields, is called a defined-contribution plan
Which of the following purposes is never allowed as an early withdrawal from a traditional individual retirement account (IRA)? purchase of a vehicle
A substantial benefit for working families with young children should a parent die are social security survivor’s benefits
Four strategies of portfolio management for long-term investors are portfolio diversification, asset allocation, buy-and-hold, and​ dollar-cost averaging
Shares in the ownership of a corporation are called​ stocks
Common stock investments are most vulnerable to ____ risk. market volatility
____ risk exists in situations that offer potential for gain as well as for loss.​ speculative
The homeowner’s policy most suitable for renters is the HO-4
Which tax is assessed by certain state governments against beneficiaries who receive inherited property? inheritance tax
When using the “buy term and invest the rest” strategy, the easiest way to ensure your money is actually invested is to set up an automatic investment program (AIP) with a mutual fund.
The period of time each year when you can make changes in your selection of health care plans available from your employer is called a(n)​ open-enrollment period
The best use of the money saved when you buy term versus cash-value life insurance is for ​investing for the future; especially retirement.
​Bear markets on average last about 9 months
Financial experts estimate that retirees need at least ____ percent of their preretirement income to live comfortably. 80-100
While away at college, expensive items such as jewelry or computers may be subject to specific limits in the homeowner’s insurance policy; ____ can be purchased for these items.​ floater protection
Common stockholders elect the corporation’s board of directors.
Living trusts can either be revocable or irrevocable
A retirement savings account that is designed to automatically rebalance the portfolio periodically to reflect the chosen allocation pattern is called a​ limited managed account
Ratings of the financial strengths of insurance companies are available from both Standard & Poors and A.M. Best Company
Fire, theft, illness, and accidents are all examples of perils
The most basic form of ownership in a corporation is common stock
Who most needs long-term care insurance protection?​ middle-income persons
​A longer waiting period on a disability income policy will reduce the disability income insurance premium
Of the following types of stock funds, ____ funds tend to be the least risky. growth and income
When purchasing insurance, you should​ shop around for the lowest cost coverage
Peter and Aiza have a Renter’s Policy (HO4) with $1,000 per Person No-Fault Medical payments coverage.Following a party at their home, one of their guests fell down the stairs and broke his ankle.How much of the $2,000 Medical Bills will Peter and Aiza’s Renter’s Policy Pay? $1000
Islam is active and healthy and has great insurance through her employer’s group health plan.To celebrate the new year (which would also be a new insurance year), she took a ski trip with some friends.Unfortunately, she was hurt in a skiing accident and broke her leg.The cost of the care she received totaled $6,500.She is now recuperating and expects to receive an invoice for her portion of bill.• annual deductible: $500• co-insurance split 80/20 (insurance 80%, Islam 20%)• co-insurance cap $1,000• episode limit $25,000By how much will the $6,500 expense be reduced when Islam pays her deductible? $500
Islam’s datamedical expenses for the incident: $6,500.•annual deductible: $500•co-insurance split 80/20 (insurance 80%, Islam 20%)•co-insurance cap $1,000•episode limit $25,000When Islam receives her statement regarding her total portion of the accrued expense for which she is responsible, what will it say she owes? $1,500
Noah is 47-year-old widowed father of 3 surviving children:Ava who is 8Ethan who is 12Mia who is 15Because Noah’s wife, Isabella, had the appropriate number of credits paid into the Social Security system, Noah receives Social Security Survivor benefits for their 3 dependent children.How old will Noah be when he EXITS the Blackout Period and is able to receive Social Security Benefits once again? 60
Timothy Clum is in the 25% Tax Bracket.He is considering the tax consequences of investing $2,000 at the end of each year for 30 years.He is assuming the investment will earn 8% annually.If Timothy invests in a Traditional IRA, a tax rate of ___% will be applied when Timothy makes the annual deposit. 0
Noah is 47-year-old widowed father of 3 surviving children:Ava who is 8Ethan who is 12Mia who is 15Because Noah’s wife, Isabella, had the appropriate number of credits paid into the Social Security system, Noah receives Social Security Survivor benefits for their 3 dependent children.In how many years will Noah ENTER the Blackout Period? 10
Noah is 47-year-old widowed father of 3 surviving children:Ava who is 8Ethan who is 12Mia who is 15Because Noah’s wife, Isabella, had the appropriate number of credits paid into the Social Security system, Noah receives Social Security Survivor benefits for their 3 dependent children.For how many years will Noah be in the Blackout Period? 3
Winfred of Lincoln, NE was recently driving her 2002 GMC Yukon XL on a gravel road when her truck slid off the road and hit a tree. She carries Collision Insurance with a $500 Deductible.The vehicle suffered $13,000 in damage.The 2002 GMC Yukon XL has a Book Value of $37,000.The Cash Value for a 2002 Yukon XL is $6,875.How much will she be reimbursed by her policy? $6,875
Timothy Clum is in the 25% Tax Bracket.He is considering the tax consequences of investing $2,000 at the end of each year for 30 years.He is assuming the investment will earn 8% annually.If Timothy pays tax on the $2000 PRIOR to investing at his marginal tax rate, how much of the $2000 will be invested? $1500
Noah is 47-year-old widowed father of 3 surviving children:Ava who is 8Ethan who is 12Mia who is 15Because Noah’s wife, Isabella, had the appropriate number of credits paid into the Social Security system, Noah receives Social Security Survivor benefits for their 3 dependent children.How old will Noah be when he ENTERS the Blackout Period? 57
Timothy Clum is in the 25% Tax Bracket.He is considering the tax consequences of investing $2,000 at the end of each year for 30 years.He is assuming the investment will earn 8% annually.If Timothy pays tax on the $2000 PRIOR to each deposit into his investment, the value of his investment after 30 years will be $________. $169,924.80
Timothy Clum is in the 25% Tax Bracket.He is considering the tax consequences of investing $2,000 at the end of each year for 30 years.He is assuming the investment will earn 8% annually.To calculate the Total Value of the investment after 30 years, you would multiply the payment amount of $2000 by _______?(Find the appropriate multiplier from the appropriate table in the appendix). 113.2832
Coleen Treptow has a Renter’s Policy (HO4) that included:$20,000 Property Coverage$100,000 Liability Coverage$500 Deductible.Her apartment suffered fire damage and $5,000 of her Personal Property was destroyed.How much would her insurance company pay? $4,500
Per Replacement-Cost Requirement:A home with a Replacement Value of $200,000 would need to be insured for at least? $160,000
Islam’s data:• medical expenses for the incident: $6,500• annual deductible: $500• co-insurance split 80/20 (insurance 80%, Islam 20%)• co-insurance cap $1,000• episode limit $25,000In order to calculate Islam’s coinsurance payment, by what amount will she multiply her 20% coinsurance proportion? $6,000
Islam’s data:• medical expenses for the incident: $6,500• annual deductible: $500• co-insurance split 80/20 (insurance 80%, Islam 20%)• co-insurance cap $1,000• episode limit $25,000Given your calculation of Islam’s coinsurance payment, when calculating what portion of the total expense she must pay, will you use the calculated coinsurance payment or the coinsurance cap? coinsurance cap
Islam’s data:• medical expenses for the incident: $6,500• annual deductible: $500• co-insurance split 80/20 (insurance 80%, Islam 20%)• co-insurance cap $1,000• episode limit $25,000According to the 20% coinsurance requirement, what would Islam’s coinsurance payment be? $1,200
Timothy Clum is in the 25% Tax Bracket.He is considering the tax consequences of investing $2,000 at the end of each year for 30 years.He is assuming the investment will earn 8% annually.If Timothy invests in a Roth IRA, a tax rate of ____% will be applied when Timothy makes the annual deposit. 25
Regina is active and healthy and has great insurance through her employer’s group health plan. To celebrate the new year (which would also be a new insurance year), she took a ski trip with some friends. Unfortunately, Regina was hurt in a skiing accident and broke her leg. The cost of the care she received totaled $6,500. She is now recuperating and expects to receive an invoice for her portion of bill.• annual deductible: $300• co-insurance split 80/20 (insurance 80%, Regina 20%)• co-insurance cap $1,000• episode limit $25,000By how much will the $6,500 expense be reduced when Regina pays her deductible? $500
When Isabella was living, she and Noah each bought a life insurance policy at the birth of their first child.They used the Multiple-of-Earnings Approach to determine how much life insurance to purchase.Isabella used the following information to determine the size of the policy in the event of her premature death:Isabella’s earnings–$50,000Assumed Rate of Inflation — 4%Number of Years — 25Using Appendix A-4, what would the Present Value of Isabella’s life insurance policy need to be to provide a Stream of Payments equivalent to $50,000 (adjusted for inflation) per year for 25 years? $781,105

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