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Insurance — Unit test Answers

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1
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Federal and state governments protect victims of identity theft by

A
creating laws that impose fines and jail time for identity thieves.
B
passing laws requiring financial institutions to reimburse victims.
C
forcing credit-reporting agencies to notify victims of suspicious activity.
D
requiring people to do a better job protecting their personal information.
2
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best

w
writing them down on one list and keeping them in a safe place at home
t
typing them into her smartphone so they are easily accessible
t
typing them into an e-mail and sending it to her personal e-mail account
w
writing them down on one list and keeping them in her wallet
3

grossdiscretionarynet

A
gross
B
discretionary
C
net
4

Bankruptcy is considered a last resort because it stays on someone’s record for

A
one to four years.
B
four to seven years.
C
seven to ten years.
D
eleven to fourteen years.
5

In some cases, it is safe to avoid insurance because

i
it is too expensive.
i
it may not be needed.
o
only one person is at risk.
o
one is already in debt.
6

Which describes a set amount of pay received by a worker over the course of a year?

t
tuition
e
expense
s
salary
h
hourly wage
7

The image shows a sales receipt.

Question illustration
A
6.25 percent
B
8.5 percent
C
10 percent
D
10.85 percent
8

A credit score tells a lender how

A
quickly someone will repay a loan.
B
much money someone will earn in the future.
C
trustworthy someone is as a lender.
D
trustworthy someone is as a borrower.
9

Natalie’s income statement for the month of October is shown. What is Natalie’s net income for the month of October?

Question illustration
A
$930.00
B
$980.00
C
$1,930.00
D
$1,980.00
10

The best way to research an expensive product is to

A
visit multiple company websites.
B
watch many television commercials.
C
make a purchase and test it out.
D
read consumer information magazines.
11

At what point should consumers stop researching a product?

w
when the research costs more than the potential savings
w
when they want to make an immediate purchase
w
when the government does the research for them
w
when they know they have waited long enough to buy
12

A high-risk investment is characterized by

A
a greater percentage chance of loss.
B
superior prospects for short-term gains.
C
a smaller percentage chance of loss.
D
lower interest and compound interest rates.
13

Look at the table below showing an example of a checkbook ledger.

Question illustration
A
Adrienne forgot to include the $2.00 ATM transaction fee.
B
Adrienne did not use $320.00 as her starting balance.
C
Adrienne deducted $23.50 from her balance instead of $32.50.
D
Adrienne did not enter her ATM withdrawal correctly.
14

Jessica is trying to get a credit card. She has a credit score of 790. How is Jessica’s lender likely to view this credit score?

J
Jessica is low risk and will pay her outstanding balances on time.
J
Jessica is low risk but will not pay her outstanding balances on time.
J
Jessica is high risk and will pay her outstanding balances on time.
J
Jessica is high risk but will not pay her outstanding balances on time.
15

Which information can be found on a person’s credit report? Check all that apply.

A
an unpaid utility bill that has been given to a collection agency
B
the person’s credit rating
C
the person’s yearly income
D
the person’s social security number
E
an inquiry from a bank that requested the person’s credit report
F
the person’s education level
16

The chart shows pricing and payment options for two big items.

Question illustration
c
choosing installment plans for both items
c
choosing rent-to-own plans for both items
s
saving up enough money before buying either item
s
splitting the items between installment and rent-to-own plans
17

Which is considered a good credit practice?

A
Use the credit card with the highest interest rate.
B
Make late payments.
C
Pay more than the minimum amount that is due.
D
Borrow more than one can afford to repay.
18

What does purchasing insurance for a business reveal about the business owner’s attitude toward financial risk?

A
It shows that the owner expects financial risk and is eliminating it by making an insurance company liable.
B
It shows that the owner acknowledges the financial risks and is willing to pay every month to transfer the risk to an insurance company.
C
It shows that the owner is willing to share ownership of the business to reduce financial risk.
D
It shows that the owner is willing to budget for short-term financial risks to avoid long-term risks.
19

Which of these qualify as variable expenses? Choose three answers.clothing purchasesloan paymentmonthly groceriesapartment rentmedical bills

A
clothing purchases
B
loan payment
C
monthly groceries
D
apartment rent
E
medical bills
20

What is one cost of avoiding insurance?

A
falling into debt if faced with a serious problem
B
not benefitting from insurance deductibles
C
not being able to purchase a car or home
D
facing increased probability of accidents

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