Finance - Personal Financial Planning - Assignment Example

User Tomoki Ando Fall 4, - FINA-3307-01 - Personal Financial Planning - Online Extension Test Final Exam Started 10/19/12 4:59 PM Submitted10/19/12 5:37 PM StatusNeeds Grading ScoreGrade not available.   Time Elapsed38 minutes out of 3 hours. InstructionsYou will have approximately 3 hours to complete this exam.  If you have any technical trouble you can call the help desk at 1-866-264-1560 or you can contact me at 817-300-8498.  Any work for the short answer/calculations will have to be scanned and/or emailed to me for partial credit consideration.

Question 1 3out of 3 points Which type of health insurance pays part of all of the surgeons fee for an operationAnswer Selected Answer: d.  hospital expensesQuestion 2 3 out of 3 points Health insurance typically includesAnswer Selected Answer: d.  all of the aboveQuestion 3 3 out of 3 points Driver classification includes information on a persons and is used to set auto insurance ratesAnswer Selected Answer: b.  type of automobileQuestion 4 3 out of 3 points Which of the following are important provisions to your life insurace contractAnswer Selected Answer: d.

  all of the aboveQuestion 5 0 out of 3 points Which life insurance provision permits the owner of the policy to borrow any amount up to the cash value of the policyAnswer Selected Answer: b.  nonforfeiture clauseQuestion 6 3 out of 3 points What form of insurance is growing faster than any other form of insurance in the countryAnswer Selected Answer: c.  long-term careQuestion 7 0 out of 3 points The following are government funded medical programsAnswer Selected Answer: a.  MedicareQuestion 8 0 out of 3 points The application for insurance includes two parts, basic information andAnswer Selected Answer: a.

  policy costs Question 9 3out of 3 points Risk assumption is the same asAnswer Selected Answer: a.  risk avoidanceQuestion 10 0 out of 3 points One of the following is not a method of estimating your life insurance requirementsAnswer Selected Answer: a.  EasyQuestion 11 0 out of 3 points Losses caused by damage to your car by another person who is at fault in the accident are covered byAnswer Selected Answer: c.  comprehensive physical damageQuestion 12 0 out of 3 points Insurance companies base claim settlements on replacement value andAnswer Selected Answer: c.

  exact valueQuestion 13 0 out of 3 points Disability is defined asAnswer Selected Answer: d.  none of the aboveQuestion 14 3 out of 3 points Coverage that pays for the current replacement cost of a stolen or damaged item is calledAnswer Selected Answer: a.  replacement value coverageQuestion 15 3 out of 3 points Basic health coverage includesAnswer Selected Answer: d.  all of the aboveQuestion 16 3 out of 3 points An HMO is defined asAnswer Selected Answer: d.  Health Maintenance OrganizationQuestion 17 3 out of 3 points A situation in which a person is held responsible for the actions of another person isAnswer Selected Answer: b.

  vicarious liabilityQuestion 18 0 out of 3 points A settlement option that provides for payment of life insurance proceeds in equal periodic installments for a specified number of years after your death is calledAnswer Selected Answer: a.  interest principal payment optionQuestion 19 3 out of 3 points Which is a method of evaluating the cost of life insurance by taking into account the time value of moneyAnswer Selected Answer: d.  cash value indexQuestion 20 0 out of 3 points Which type of will has been gaining polpularity due to the increased exemption?

Answer Selected Answer: d.  stated dollar amountQuestion 21 3 out of 3 points Which source of investment information provides the most current dataAnswer Selected Answer: a.  newspapersQuestion 22 3 out of 3 points Which of the following investments would have the greatest potential for safetyAnswer Selected Answer: a.  government bondsQuestion 23 3 out of 3 points Which of the following investments would have the greatest potential for riskAnswer Selected Answer: c.  optionsQuestion 24 3 out of 3 points When stocks are being traded between investors, they are traded in what marketAnswer Selected Answer: c.

  secondaryQuestion 25 0 out of 3 points Trusts can beAnswer Selected Answer: a.  callable or noncallableQuestion 26 3 out of 3 points The first step in retrirement planning is toAnswer Selected Answer: d.  analyze your current assets and liabilitiesQuestion 27 0 out of 3 points Some mutual funds charge 12b-1 fees to defray the cost ofAnswer Selected Answer: b.  selling securities in the funds portfolioQuestion 28 0 out of 3 points Payments made to funds shareholders that result in the sales of securities in the funds portfolio are calledAnswer Selected Answer:   [None Given] Question 29 3 out of 3 points In what type of annuity is the money you pay invested in common stock or other equities, and the income you receive dependent on the investment resultsAnswer Selected Answer: c.

  life annuity with installments certainQuestion 30 3 out of 3 points Corporate bonds areAnswer Selected Answer: b.  must be repaid at maturityQuestion 31 3 out of 3 points An investor who wants a tax-free investment would choose which type of fundAnswer Selected Answer: d.  municipal bondQuestion 32 3 out of 3 points An investor who wants a tax-free investment would choose which type of fundAnswer Selected Answer: d.  municipal bondQuestion 33 3 out of 3 points A stock that follows the business cycle of advances and declines in the economy is called what kind of stockAnswer Selected Answer: d.

  cyclicalQuestion 34 3 out of 3 points A stock splitAnswer Selected Answer: b.  enables management to bring a stocks price in an "ideal" price rangeQuestion 35 3 out of 3 points A mutual fund in which new shares are issued and redeemed by the investment company at the request of investors is called what type of fundAnswer Selected Answer: b.  open endQuestion 36 3 out of 3 points A feature that enables preferred stock investors to receive omitted dividends is called what kind of featureAnswer Selected Answer: a.

  cumulativeQuestion 37 3 out of 3 points A handwritten will that you prepare yourself is called a                                   willAnswer Selected Answer: a.  holographicQuestion 38 3 out of 3 points A document that prospective mutual fund investors receive is called a(n)Answer Selected Answer: d.  prospectusQuestion 39 0 out of 3 points A corporation whose stock is owned by relatively few people and is traded openly in stock markets is called what kind of corporationAnswer Selected Answer: b.

  privateQuestion 40 0 out of 3 points Under what retirement plan does your employer make non-taxable contributions to the plan for your benefit and reduce your salary by the same amountAnswer Selected Answer: d.  Defined BenefitQuestion 41 Needs Grading Calculate how much you would have in 10 years if you saved $2,000 a year at an annual rate of 10 percent per year? (assume annual compounding)Answer Selected Answer: 22000$Question 42 Needs Grading If Carissa Dalton/>/> has a $130,000 home insured for $100,000, based on the 80 percent coinsurance provision, how much would the insurance company pay on a $5,000 claim?

Answer Selected Answer: $1600Question 43 Needs Grading Bill Matthews invested $9,800 in the John Hancock growth and income fund.  The fund charges a 5.3% commission when shares are purchased.  Calculate the amount of commission Bill must pay.Answer Selected Answer: $5149Question 44 Needs Grading You and your spouse are in good health and have reasonably secure careers. Each of you makes about $28,000 annually. You own a home with an $80,000 mortgage, and you owe $10,000 on car loans, $5,000 in personal debts, and $3,000 on credit card loans.

You have no other debts. You have no plans to increase the size of your family in the near future. Estimate your total insurance needs using the DINK method.  Assume $5,000 for funeral expenses.Answer Selected Answer: $400Question 45 Needs Grading The Kelleher family has health insurance coverage that pays 80 percent out-of-hospital expenses after a $500 deductible per person. If one family member has doctor and prescription medication expenses of $2,800, what amount would the insurance company pay?

Answer Selected Answer: $136Question 46 Needs Grading James Hayes owns Ohio Utility preferred stock.  If this preferred stock issue pays 6.25% based on a par value of $25, what is the dollar amount of the dividend for one share of Ohio Utility?Answer Selected Answer: $4Question 47 Needs Grading Assume that you purchase an investment for $6,000 that pays $50 annual income.  You sell the investment at the end of one year for $6,850, what is the annual rate of return?Answer Selected Answer: 70%Question 48 Needs Grading Becky Fenton has 25/50/10 automobile insurance coverage.

If two other people are awarded $15,000 each for injuries in an auto accident in which Becky was judged at fault, how much of this judgment would the insurance cover?Answer Selected Answer: $30000Friday, October 19, 2012 5:37:33 PM CDTPeople always  want to achieve different goals in terms of financial achievement. They are the basic rules that one needs to follow to come up with a good and comprehensive finical plan that will not affect his/her income. The first thing you need to know is your current financial income.

This will enable you to plan accurately. The second is developing a financial target. This will make you remain focused on what you do. Also one needs to know what are the alternatives one has in case one side fails or an emergency occurs. Every decision you make must have an alternative and a course of action. Creation of financial plan should be another factor. One needs to choose his or her goals clearly either long term or short term ones. For example one can buy things in higher purchases to attain long term goal.

Finally is reviewing your plan time and again as it  is dynamic and tend to change now and then .This is to enable accommodation of more factors that come along the way.