Question 1

A homeowner's insurance policy that includes a provision for ________ would provide the homeowner with enough cash to replace the items lost with new items.

Accepted Answer

A)   actual book value protection
B)   cash in lieu of coverage
C)   guaranteed replacement cost
D)   full collateral damage protectionE) A) and B)
F) A) and C)

Question 2

Keogh plans are intended to help small business owners save for retirement.

Accepted Answer

A) True 
 B)False

Question 3

Due to the high cost of the insurance premiums, many people have found that it makes financial sense to carry medical insurance only if their employer provides it.

Accepted Answer

A) True 
 B)False

Question 4

In order to accumulate capital, young adults are likely to have to

Accepted Answer

A)   accept a lifestyle that sacrifices some amenities.
B)   live beyond their means.
C)   rely on credit cards for basic purchases in order to conserve on cash.
D)   borrow funds from a bank.E) B) and C)
F) A) and D)

Question 5

During the first few years of a home mortgage, almost all the payments go for interest on the loan. This high interest is a reason it is better for young people to rent rather than buy.

Accepted Answer

A) True 
 B)False

Question 6

The greatest return over a period of several years is likely to be earned by investing in a

Accepted Answer

A)   small home in a great location.
B)   savings account in a bank.
C)   large home in a deteriorating neighborhood.
D)   moderate size home in a rural setting.E) A) and D)
F) B) and D)

Question 7

________ life insurance offers pure insurance protection for a given period of time.

Accepted Answer

A)   Term
B)   Temporary
C)   Managed premium
D)   Equity-basedE) A) and B)
F) A) and C)

Question 8

Buying ________ is often an attractive strategy for young couples, since they can live in one unit and rent the other half to supplement their income, while taking tax deductions on interest and real estate taxes.

Accepted Answer

A)   a semiprivate housing unit
B)   a ranch apartment
C)   a biplex
D)   attached homesE) None of the above
F) C) and D)

Question 9

The people who assist families in developing a comprehensive program that covers investments, taxes, insurance, and retirement plans are called

Accepted Answer

A)   insurance salespeople.
B)   financial planners.
C)   portfolio managers.
D)   stockbrokers.E) None of the above
F) B) and C)

Question 10

The U.S. government provides several types of financial incentives to encourage people to attend college.

Accepted Answer

A) True 
 B)False

Question 11

Most people find it relatively easy to live frugally.

Accepted Answer

A) True 
 B)False

Question 12

How does term insurance differ from whole life insurance? Describe the newer types of life insurance that have been offered in recent years.

Accepted Answer

Term life insurance offers pure insuranc...

Question 13

A common purpose of a rider added to a homeowner's policy is to

Accepted Answer

A)   provide coverage for items that the standard policy does not cover.
B)   limit the insurance company's liability for certain types of losses.
C)   waive the provision that requires the owners to get a health exam.
D)   allow the policy holder to obtain health, disability, and auto insurance under their homeowner's plan.E) None of the above
F) A) and C)

Question 14

Brad and Tori are experiencing marriage difficulties regarding money. One technique to help them control and forecast their future financial situation, as well as allow them to achieve their financial goals, would be to prepare a(n)

Accepted Answer

A)   income statement.
B)   balance sheet.
C)   budget.
D)   asset inventory.E) A) and C)
F) B) and D)

Question 15

Whole life insurance premiums provide the insured with both pure insurance and a savings plan.

Accepted Answer

A) True 
 B)False

Question 16

Real estate taxes and mortgage interest payments are both

Accepted Answer

A)   expenses of home ownership on which the government levies a tax.
B)   tax deductible for renters.
C)   tax deductible for homeowners.
D)   taxable income for renters and homeowners.E) A) and D)
F) C) and D)

Question 17

Employees of small businesses can contribute to a Keogh plan.

Accepted Answer

A) True 
 B)False

Question 18

IRAs, 401(k), and Keogh plans all include incentives to encourage saving for retirement.

Accepted Answer

A) True 
 B)False

Question 19

________ is a form of life insurance that provides both a savings plan and pure insurance coverage.

Accepted Answer

A)   Term life insurance
B)   Growth-centered life insurance
C)   Whole life insurance
D)   Multiyear level-premium insuranceE) A) and C)
F) A) and D)

Question 20

The three keys that have the greatest influence on how the value of your home increases over time are: (1) size (square feet), (2) age, and (3) design features.

Accepted Answer

A) True 
 B)False

Exam 24: Appendix: Managing Personal Finances

How does term insurance differ from whole life insurance? Describe the newer types of life insurance that have been offered in recent years.

Correct AnswerverifiedTerm life insurance offers pure insuranc...View AnswerShow Answer

________ is a form of life insurance that provides both a savings plan and pure insurance coverage.

Correct AnswerverifiedShow Answer

Brad and Tori are experiencing marriage difficulties regarding money. One technique to help them control and forecast their future financial situation, as well as allow them to achieve their financial goals, would be to prepare a(n)

Correct AnswerverifiedShow Answer

The U.S. government provides several types of financial incentives to encourage people to attend college.

Correct AnswerverifiedShow Answer

Keogh plans are intended to help small business owners save for retirement.

Correct AnswerverifiedShow Answer

The greatest return over a period of several years is likely to be earned by investing in a

Correct AnswerverifiedShow Answer

Real estate taxes and mortgage interest payments are both

Correct AnswerverifiedShow Answer

Whole life insurance premiums provide the insured with both pure insurance and a savings plan.

Correct AnswerverifiedShow Answer

________ life insurance offers pure insurance protection for a given period of time.

Correct AnswerverifiedShow Answer

The people who assist families in developing a comprehensive program that covers investments, taxes, insurance, and retirement plans are called

Correct AnswerverifiedShow Answer

IRAs, 401(k), and Keogh plans all include incentives to encourage saving for retirement.

Correct AnswerverifiedShow Answer

In order to accumulate capital, young adults are likely to have to

Correct AnswerverifiedShow Answer

During the first few years of a home mortgage, almost all the payments go for interest on the loan. This high interest is a reason it is better for young people to rent rather than buy.

Correct AnswerverifiedShow Answer

Most people find it relatively easy to live frugally.

Correct AnswerverifiedShow Answer

Employees of small businesses can contribute to a Keogh plan.

Correct AnswerverifiedShow Answer

Buying ________ is often an attractive strategy for young couples, since they can live in one unit and rent the other half to supplement their income, while taking tax deductions on interest and real estate taxes.

Correct AnswerverifiedShow Answer

A common purpose of a rider added to a homeowner's policy is to

Correct AnswerverifiedShow Answer

A homeowner's insurance policy that includes a provision for ________ would provide the homeowner with enough cash to replace the items lost with new items.

Correct AnswerverifiedShow Answer

Due to the high cost of the insurance premiums, many people have found that it makes financial sense to carry medical insurance only if their employer provides it.

Correct AnswerverifiedShow Answer

The three keys that have the greatest influence on how the value of your home increases over time are: (1) size (square feet), (2) age, and (3) design features.

Correct AnswerverifiedShow Answer

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Term life insurance offers pure insuranc...
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