Insurance — Unit test Answers

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1
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Who is following the law when it comes to protecting investors’ funds?

A
a financial planner who pitches a risk-free stock
B
a mutual fund advisor who informs investors about risks
C
a broker who sells CDs from nonfinancial institutions
D
a realtor who advertises a can’t-miss land buy
3

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
4

One advantage to buying a CD is that it

A
can be purchased for different amounts.
B
is high risk but comes with great rewards.
C
can be used for long-term retirement.
D
is high risk but backed by the government.
9

Which is most likely to happen to consumers with good credit? Check all that apply.They can be approved for loans.They are denied a mortgage.They can receive lower interest rates.They are denied an unsecured loan.They can use credit in emergencies.They are forced into high interest rates.

A
They can be approved for loans.
B
They are denied a mortgage.
C
They can receive lower interest rates.
D
They are denied an unsecured loan.
E
They can use credit in emergencies.
F
They are forced into high interest rates.
10

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A
for a limited time
B
two bottles for $29.95
C
our proven supplement
D
no other diet pill offers
11

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.
12

Phung works as a pharmacist in Tampa, Florida. Her income is $116,200 a year.Which statements about Phung’s income and tax situation are correct? Check all that apply.

P
Phung will pay 28% of her total income in state taxes.
T
The first $9,075 she makes each year will be taxed at 10%.
P
Portions of Phung’s income will be taxed at 10%, 15%, 25%, and 28%.
P
Phung will pay 28% of her total income in federal taxes.
A
After $36,000, Phung’s taxable income will experience the greatest tax bracket increase.
13

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.
14

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
15

Which is the best question for Joe to ask himself when deciding whether to open a checking or savings account?

A
Is there an ATM near my home or work?
B
Does the bank offer free checking?
C
If I need a loan, will they give it to me?
D
Why am I opening a bank account?
17

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.
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 describes the difference between a personal loan and a credit card?

A
Credit cards offer lump sums of money, while personal loans set a maximum amount a person can borrow.
B
Credit cards are secured loans for large amounts, while personal loans are unsecured for small purchases.
C
Personal loans offer lump sums of money, while credit cards set a maximum amount a person can borrow.
D
Personal loans are secured for small purchases, while credit cards are unsecured loans for large amounts.
20

What is the job outlook for a US postal worker?

A
The career is growing and will provide more opportunities over time.
B
The career is growing and will provide fewer opportunities over time.
C
The career is shrinking and will provide more opportunities over time.
D
The career is shrinking and will provide fewer opportunities over time.
21

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.

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