Personal Finance: Practice exam #3 (Chapters 11,12,13)

Which one of the following is a source of government health insurance? Medicaid
The affordability of which one of these is one of the most important social issues of our time? Health care
Hospital insurance is which part of Medicare? Part A
Which of the following should you ask about when considering a long-term care insurance policy? -Daily benefit-Benefit period-Policy limit-Elimination period
Jose Gonzales just turned 65 this year. He should apply for Medicare benefits at a local: Social Security office.
All of the following statements are considered to be good advice for a potential investor starting an investment program except: Increase credit purchases to conserve cash.
Bob McDowell is thinking about buying an investment. The most important consideration when making this investment is the location of the investment. What investment is Bob thinking about purchasing? Real estate
Medical insurance is which part of Medicare? Part B
The Affordable Health Act of 2010 requires new health plans to allow young people to remain on their parents’ insurance policy until what age? 26
What are some possible reasons for high and rising costs of health care? -The use of sophisticated and high-priced equipment-Medical personnel who command high earnings-Innovative but costly treatment for some illnesses-The increasing number and longevity of elderly people
James Gripka has a mutual fund that automatically takes $50 out of his checking account each month. Which suggestion for obtaining the money he needs for investing is he following? Participating in an elective savings program
The ease with which an investment can be converted to cash without a substantial loss in dollar value is called the: liquidity factor.
Which one of the following is a source of government health insurance? Medicare
In 2009, the largest percentage of U.S. health care dollars was spent on: hospital care.
After Christmas is over, Ted Riley works hard to control his expenses in February so that he can make an extra payment into a mutual fund. Which suggestion for obtaining the money needs for investing is he following? Making a special effort once or twice a year to save
Individuals and families purchase life insurance primarily to: fill financial needs created by the loss of the breadwinner.
What should you consider before you buy life insurance? You should consider all of the factors listed
Which of the following are common uses of life insurance proceeds? -Education of children-Make charitable bequests after death-Pay off the mortgage on a home-Uncovered medical expenses and funeral costs
Which of the following is not a key provision of the Patient Protection and Affordable Care Act of 2010? Encourages insurance companies to drop people from coverage when they get sick
Which of the following attributes would not be used by an Underwriter to determine the appropriate premiums to charge for insurance? Marital status
Allen Arnold earns $3,000 per month. He pays his mortgage, utilities, grocery and other bills and then he makes sure to set aside $150 for his savings and investment accounts before he spends money to go to movies and other personal expenses. Which suggestion for obtaining the money he needs for investing is he following? Paying himself first
Standard & Poor’s and Value Line are companies that would be examples of: investors’ services.
How many different types of basic life insurance are there? 2
Which one of the following is not a business periodical? New York Stock Exchange Report
You probably have little or no need for life insurance if you are: a single person living alone or with parents.
The 2001 CSO Table separates the mortality experience by: sex.
Which of the following types of investment information can be found on the Internet? -Interest rates for certificates of deposit-Current price information for stocks, bonds, and mutual funds-Broker’s buy and sell recommendations-Financial calculators
Which type of life insurance is the least popular today? Industrial life insurance
How frequently does the premium for a whole life policy change during the insured’s life? It never changes
Who has the greatest need for life insurance? Households with small children
What should you do when an HMO denies treatment or coverage? You should do everything included in the other answers.
Which is a correct statement about life insurance? People are less apt to actively seek life insurance than health insurance.
Establishing a(n) ___________ ensures that you will have an amount of money that can be obtained quickly in case of immediate need. emergency fund
What can you do to responsibly reduce your health care costs? Get some exercise.
An emergency fund should be deposited in a: savings account at the highest available interest rate.
Because you are young and healthy now, you may overlook the very real need for which type of insurance? Disability income
With disability income insurance, benefits usually begin: between 30 and 90 days after the disability occurs.
Typical examples of uses of life insurance proceeds include: -paying off a home mortgage.-funding an endowment.-making charitable bequests.-paying estate taxes.
Which type of insurance provides for the partial replacement of income lost by employees as a result of an accident or illness? Disability income
Which type of health insurance pays part or all of the surgeon’s fee for an operation? Surgical expense
The fees for investor services and newsletters generally range from ____________ per year. $30 to $1,000
Which one of these investments pools the funds of many investors and hires a professional money manager to manage those funds? Mutual fund
Term insurance is protection for a specified period of time, usually: Term insurance is offered in all of the intervals listed.
Equity capital is money: obtained from the owners of a business.
Alice Cooper contributes ten percent of her monthly earnings to her 401(k) plan at work. The plan allows her to invest in several different types of mutual funds and her employer matches up to 5% of her salary. Which suggestion for obtaining the money she needs for investing is she following? Taking advantage of employer-sponsored retirement programs
Which one of the following is the most readily available source of current price information for an investment in stocks or bonds? Daily newspaper
Life insurance premiums are determined basically by the: use of mortality tables.
Taylor Jones has a life insurance policy that returns every cent she pays in premiums if she outlives the term of the policy. She knows this policy costs 30 to 50 percent more than a traditional policy but thinks it is worth it. What type of term life insurance does Taylor have? Return-of-premium
Which country has the highest per capita medical expenditures of any industrialized country in the world? U.S.A.
Which of the following refer to permanent insurance? -Whole life-Straight life-Ordinary life-Cash-value life
Which of the following questions are important to consider when choosing an insurance agent? You should be asking all of these questions.
Fundamentally, group insurance is ____________ insurance. term
Over the past 50 years, stocks have returned approximately 10 percent a year while U.S. government bonds have returned about what percent? 5
Which of the following groups have undertaken innovative activities to contain the costs of health care? -Employers-Labor unions-Health insurers-Consumers
A two-earner couple likely will have: a moderate need for life insurance, especially if they have a mortgage.
Sam Waters just received $10,000 from his grandmother’s estate. He has thought about buying himself a new Harley with the money but has decided instead to add the money to his mutual fund account. Which suggestion for obtaining the money he needs for investing is he following? Taking advantage of gifts, inheritance and other windfalls
have lower premiums. have lower premiums.
Which type of insurance is sometimes called temporary insurance? Term insurance

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