UGBA 135 FINAL EXAM COMPREHENSIVE
REVIEW QUESTIONS WITH ANSWERS
◉ What fraction of drivers are uninsured? Answer: 1/7th
◉ In the video on life insurance, which type of life insurance policy is
recommended for most people? Answer: term life insurance
◉ A life insurance policy is likely to cost more if which of the
following are true: Answer: 1. You smoke
2. If the death benefit is higher (if your beneficiaries will be paid
more)
◉ The cost of repairs and maintenance adds to the cost basis of your
house for tax purposes. Answer: False
◉ Interest on a home mortgage may be tax deductible and increases
taxable income. Answer: False
◉ Operating profits from an apartment building are taxed as long
term capital gains. Answer: False
,◉ When a remodeling job is completed, any remaining mechanic's
liens will automatically be cancelled. Answer: False
◉ In real estate, cost basis equals the purchase price, plus capital
improvements, less depreciation. Answer: TRUE
◉ Matching 401k employer contributions must always go into a
traditional 401k, not a Roth 401k. Answer: True
◉ If you are self-employed, you may be able to contribute and tax
deduct over $50,000 put into a Solo 401k plan. Answer: True
◉ Only when you take a boarder into your primary residence, do the
rules regarding discrimination not apply. Answer: TRUE;A landlord
may not discriminate against anyone on the basis of race, religion,
color, creed, sex, sexual orientation, age, etc. This is guaranteed by
both state and federal laws. The only exception is taking a boarder
into one's primary residence.
◉ What is term life insurance? Answer: Term insurance is strictly
"death insurance," with rates actuarially calculated. The only time
you or your family collect under the policy is if the insured person
dies
, ◉ What is whole life insurance? Answer: Whole life insurance
combines the cost of death or term insurance with a savings
component called the cash value, an amount which is accumulated
by you, managed and invested by the insurer. The cash value builds
up tax-free and compounds in your account.
◉ What is equity in business? Answer: Equity represents a
permanent ownership stake in the business.
◉ What is the Rule of 72? Answer: estimate how long it will take for
a sum of money to double at a given interest rate, assuming interest
is compounded annually. (90)
◉ What is compounding interest? Answer: Interest gained on the
principle and on interest already earned
◉ What is the cornerstone of wealth? Answer: Being frugal, not
cheap but value oriented
◉ What is consideration in a contract? Answer: there is a mutual
obligation to perform, and that something of value is to be
exchanged. It presumes there is an offer of some type by a
competent party, and acceptance by another competent party.
Consideration could be money, services, physical objects, future
actions, promised actions, etc.
REVIEW QUESTIONS WITH ANSWERS
◉ What fraction of drivers are uninsured? Answer: 1/7th
◉ In the video on life insurance, which type of life insurance policy is
recommended for most people? Answer: term life insurance
◉ A life insurance policy is likely to cost more if which of the
following are true: Answer: 1. You smoke
2. If the death benefit is higher (if your beneficiaries will be paid
more)
◉ The cost of repairs and maintenance adds to the cost basis of your
house for tax purposes. Answer: False
◉ Interest on a home mortgage may be tax deductible and increases
taxable income. Answer: False
◉ Operating profits from an apartment building are taxed as long
term capital gains. Answer: False
,◉ When a remodeling job is completed, any remaining mechanic's
liens will automatically be cancelled. Answer: False
◉ In real estate, cost basis equals the purchase price, plus capital
improvements, less depreciation. Answer: TRUE
◉ Matching 401k employer contributions must always go into a
traditional 401k, not a Roth 401k. Answer: True
◉ If you are self-employed, you may be able to contribute and tax
deduct over $50,000 put into a Solo 401k plan. Answer: True
◉ Only when you take a boarder into your primary residence, do the
rules regarding discrimination not apply. Answer: TRUE;A landlord
may not discriminate against anyone on the basis of race, religion,
color, creed, sex, sexual orientation, age, etc. This is guaranteed by
both state and federal laws. The only exception is taking a boarder
into one's primary residence.
◉ What is term life insurance? Answer: Term insurance is strictly
"death insurance," with rates actuarially calculated. The only time
you or your family collect under the policy is if the insured person
dies
, ◉ What is whole life insurance? Answer: Whole life insurance
combines the cost of death or term insurance with a savings
component called the cash value, an amount which is accumulated
by you, managed and invested by the insurer. The cash value builds
up tax-free and compounds in your account.
◉ What is equity in business? Answer: Equity represents a
permanent ownership stake in the business.
◉ What is the Rule of 72? Answer: estimate how long it will take for
a sum of money to double at a given interest rate, assuming interest
is compounded annually. (90)
◉ What is compounding interest? Answer: Interest gained on the
principle and on interest already earned
◉ What is the cornerstone of wealth? Answer: Being frugal, not
cheap but value oriented
◉ What is consideration in a contract? Answer: there is a mutual
obligation to perform, and that something of value is to be
exchanged. It presumes there is an offer of some type by a
competent party, and acceptance by another competent party.
Consideration could be money, services, physical objects, future
actions, promised actions, etc.
