being fin FINA 2103-Personal Financial Management and Planning - Test 3D 1. Cost

Question

being fin FINA 2103-Personal Financial Management and Planning - Test 3D 1. Cost of insurance is not one of the things to consider before making an auto purchase aT a. True b. False Being financially stable is one of the instances leasing a car will make sense 3. 2 One advantage of a Term Life Insurance is it allows flexible death benefit 4. a. True b. False Cash Value insurance does not have a savings plan a. True b. False A universal life insurance has tax deferred benefits a. True b. False 5. 6. Finance charge is one of the things that determine the cost of a car lease 7. a. True b. False An advantage of renting over buying a house is a. Allows you build equity b. provides tax deduction c. no repair and maintenance d. no rent increase A named perils insurance offers an perils protection except those named a. True b. False 9· Flood protection is part of Home Owners Insurance a. True b. False 10. The two sections of a Home Owners Policy are Property coverage and Personal Liability a. True b. False 11. The 80% rule ensures you get full replacement cost up to the insurance purchased True b. False 12. An advantage of a co-op is low cost of maintenance a. True b. False 13. A typical downpayment on a house purchase is: a. 10% b, 15% c. 2016 d. 25% e. None of the above 14. Appraisal fee is not part of a closing statement a. True b. False 15. allow a home buyer to reduce interest charges over the loan peniod by accepting a one-time payment at closing a. points b. appraisal fee c. application fee d. all of the above e. None of the above ·The monthly repayment of a $150,000 mortgage loan at 5% for 30 years is a. $760.05 b. $851.85 c. $ 805.20 d.$87690 17. Risk pooling in insurance is similar to diversification a. True b. False 18. Your credit score does not affect the cost of insurance you purchase a. True b. False 19. A step in making smart buying decisions is to maintain your purchase a. True b. False 20. In making a complaint after a purchase, keeping a record of interactions with the seller is a good idea a. True b. False 21. Monthly repayment of a car loan of $10,000 at 13% for 24 months is a. $476.66 b. $478.90 c $475.40 d. $484.90 e$477.80 22 Reasonable funeral and medical expenses are covered in Medical Expenses Coverage a. True b. False 23. The determinants of the cost of auto insurance include a. Driving Record b. Where you live c. Your height d. a and b only e. a, b and c. 24. Raising the amount of deductible can reduce the cost of auto and home insurance a. True b. False 25. The needs approach to determining how much life insurance is adequate is a one size fits all a. True b. False 26. One of the items not covered by Auto Insurance is a. Admitting guilt b. Driving in a race or speed contest c.Medical expenses d. Damage to the auto 27. Part A auto insurance is Medical expenses coverage Protection b. Liability coverage c. Damage to Automobile a. d. Uninsured Motorists 28· There is a positive relationship between low credit score and high claims filed True b. False 29. In differentiating between a want and a need, you must never buy anything that is a want a. True b. False 30. In doing your homework for a purchase, one of the considerations is if you can afford an item a. True b. False 31. Doing business over the telephone is a good idea a. True b. False 32. One of the ways to maintaining an auto purchase is a. Not driving over 15,000 miles a year b. buying a warranty c. changing cars every 2 years d. Ignoring signs of trouble e. None of the above 33. allows you to stay on your employers health insurance after leaving employment d. FMLA Health Savings Account b. FINRA C. GRICO c. COBRA a. First month interest and principal for a car loan of $10,000 at 14% for 18 months is 34, $116.67/$502.53 b.$118.29/$506.69 c. $134.87/$521.89 d. $120.05/$530.23 One of the reasons for high cost of health insurance is 35. People are very sick b. high cost of research c. No incentive to economize d. a and c e. b and c The most popular form of managed healthcare is a. 36· PPO b. Fee for Service c. HMO d. None of the above

Explanation / Answer

1.) The given statement is false.

This is because we do consider the cost of insurance while making auto purchase. Insurance cost adds to the vehicle's total cost of ownership and hence impacts the buying decision.

2.) The given statement is false.

This is because if the person is financially stable, he can rather look for owning a asset rather than leasing it. This will give him more satisfaction as compared to leasing.

3.) The given statement is false.

This is because term insurance is a plan where an insurance company guarantees payment of face value of insurance to the beneficiary if the death occurs within the stated period. No payment or coverage exists if the person lives beyond the stated period.

4.) The given statement is false.

This is because cash value insurance is a plan where an insurance company guarantees both the death benefit as well as result in accumulation of cash resulting in savings for future.

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