Final Assignment FP 101 1) When does repayment of a PLUS loan begin? | A. 6 months after disbursement| | B. 6 months after graduation| | C. 9 months after graduation| | D. 2 months after disbursement| | | | 2) Which of the following is true about credit reports? | A. A credit report does not list requests for your credit report. | | B. You always have to pay for a credit report| | C. There is only one credit bureau that provides credit reports| | D. You can get a free credit report by contacting a credit bureau. | | | | 3) Which of the following is true about student loans? A. All student loans are subsidized. | | B. All student loans are issued by the federal government. | | C. Rates on student loans tend to be more favorable than other types of consumer credit. | | D. You do not need to be a US citizen to obtain a loan from a federal program. | | | | 4) Which of the following is not a good reason to refinance a home mortgage? | A. A reduction in the term of the mortgage| | B. Access to the equity in the home| | C. A reduction in the interest rate of at least 1 perccent| | D. A significant increase in the monthly payment. | | | | ) Which of the following is not true about student loans? | A. There are two types of student loans: subsidized or unsubsidized. | | B. You may qualify for a loan even if you are in default on another student loan. | | C. It is possible to defer payment on some student loans until after you graduate. | | D. They often carry lower interest rates than other types of loans or credit cards. | | | | 6) Which of the following is considered a sign of credit card debt trouble? | A. You are at or over the limit on all of your credit card accounts| | B. Don’t use your credit cards to pay for regular expenditures| | C.

You avoid credit cards with high interest rates| | D. You pay your credit card balances in full every month| | | | 7) Which of the following is not a good option if you recognize signs of credit trouble in yourself? | A. You should think about ways to cut expenses| | B. You should use your savings to pay your bills. | | C. You should get advice from a legitimate consumer counseling organization| | D. You should think about steps to reduce your debt| | | | 8) Which type of mortgage loan features rates that change periodically with market conditions? | A.

Growing equity mortgage| | B. Reverse equity mortgage| | C. ARM| | D. Conventional mortgage| | | | 9) Which of the following statements is true of adjustable-rate mortgages? | A. The interest rate changes on ARMs are limited per year and per lifetime. | | B. There is no limit as the amount of payment change on an ARM. | | C. They cannot be converted to fixed-rate loans. | | D. They generally carry higher initial interest rates than conventional mortgages. | | | | 10) Which of the following is considered an advantage of home ownership? | A. Profits on real estate are guaranteed. | B. Mortgage payments are always lower than rent payments. | | C. You are responsible for all repairs and maintenance. | | D. Interest paid on the mortgage of your home is tax deductible. | | 11) Who is the person designated to carry out the provisions of a will? | A. the trustee| | B. the beneficiary| | C. the executor or executrix| | D. the guardian| | | | 12) Which of the following best describes the role of a real estate broker? | A. dealer, who purchases goods for resale to consumers| | B. lessor, who owns the asset and offers it for lease| | C. rincipal, who has given responsibility to another| | D. agent, who is acting on behalf of another person| | | | 13) Which of the following health plans limits your choice of doctors to those under contract with the plan? | A. Indemnity plan| | B. HMO plan| | C. Consumer Choice plan| | D. Medicare Part D| | | | 14) Which of the following is not a step in the housing decision process? | A. Negotiate terms of the lease. | | B. Identify the costs of home ownership. | | C. Consider whether to rent or buy. | | D. Determine your housing needs. | | | | 5) What type of auto insurance provides coverage from a tree falling on your car as it sits in your driveway? | A. collision coverage. | | B. comprehensive physical damage coverage. | | C. property damage liability coverage. | | D. bodily injury liability. | | | | 16) What is the basis for the concept of risk pooling? | A. the law of large numbers. | | B. statistical variation. | | C. the laws of probability. | | D. the law of averages. | | | | 17) If a single parent of a minor child dies intestate – without having written a valid will – what will happen to the child? | A.

The state will appoint a guardian for the child who may or may not be a relative. | | B. The child will be sent to live in a state-run orphanage| | C. The grandparents automatically become the legal guardians of the child. | | D. The child’s other parent automatically becomes the legal guardian of the child. | | | | 18) What is the major advantage of term life insurance over whole life insurance? | A. term life tends to have lower premiums than whole life. | | B. term life has a choice of investments; whole life does not. | | C. term life is available without proof of insurability; whole life is not. | D. term life always has a constant premium; whole life does not. | | | | 19) How does life insurance differ from other types of insurance? | A. The risk of a policy payout is 100 percent. | | B. Life insurance policies are very short-term. | | C. Insurers almost never need to pay a claim. | | D. Life insurance is not based on risk pooling. | | | | 20) Which of the following is not one of the main sources of auto dealer profits? | A. licensing fees| | B. service contracts| | C. manufacturer allowances| | D. profit to be on traded vehicle| | 1) When do medical expenses qualify as a deduction? | A. When the total is less than your adjusted gross income. | | B. When the total is greater than half of your adjusted gross income. | | C. When the total is less that the designated percentage of your gross income. | | D. When the total is greater than the designated percentage of your adjusted gross income. | | | | 22) Which of the following is considered a tax credit, which will directly reduce the taxes you owe? | A. Gifts to charity| | B. Medical expenses| | C. Mortgage interest| | D. Earned Income Credit| | | | 3) Which of the following statements is not true regarding spousal benefits under Social Security? | A. There are no protections in the program for women who do not work outside the home. | | B. If a woman remarries, she will not be eligible for a divorcee benefit. | | C. A divorced woman may receive 50 percent of her ex-husband’s benefits if she qualifies. | | D. You can qualify for benefits if your spouse is fully insured in the program. | | | | 24) What type of retirement benefit plan is based on a formula that considers your years of service and highest salary? | A. ixed salary plan. | | B. variable salary plan. | | C. defined benefit plan. | | D. defined contribution plan. | | | | 25) What is the name for reimbursement accounts for qualified medical and child care expenses? | A. deferred compensation plans. | | B. option plans. | | C. flexible spending accounts. | | D. cafeteria plans. | | | | 26) Which of the following is a result of a dollar cost averaging investment strategy? | A. lower average purchase price than the average price over the long term| | B. greater return than a buy-and-hold strategy if prices are rising| | C. igher average purchase price than the average price over the long term| | D. smaller return than a buy-and-hold strategy if prices are rising| | | | 27) Which retirement saving program has a benefit that will depend on your yearly contribution and the rate of return on invested assets? | A. fixed salary plan. | | B. variable salary plan. | | C. defined benefits plan. | | D. defined contribution plan. | | | | 28) How do many employer based retirement plans minimize taxes? | A. By maximizing tax credits| | B. By increasing the number of exemptions| C. By increasing itemized deductions| | D. By reducing taxable income| | | | 29) Which of the following is not a good option to consider if you don’t have enough money to retire? | A. rely on family| | B. continue to work| | C. increase savings| | D. increase expenses| | | | 30) What is one reason many people are not financially very well prepared for retirement? | A. They are too short-sighted. | | B. They focus too much on long-term goals. | | C. They overestimate inflation. | | D. They fail to focus on the averages. | |