FIN 2100 FINAL EXAM QUESTIONS
AND ANSWERS ALL CORRECT
What document is generally used to name the guardian of your minor children in the
event that both you and your spouse should die? - Answer- a last will and testament
Which type of trust would be used for young adult children, where the deceased parents
wish to ensure that the principal of the trust is maintained for a long period of time? -
Answer- a spendthrift trust
What happens if you die without a will - Answer- the courts will determine how your
assets will be distributed based on state law
What are your options for managing your property after your death if your children are
still relatively young? - Answer- Name a custodian under the Uniform Transfers to
Minors Act.
Set up a "pot or family trust" for your children.
Name a property guardian in your will.
Correct!
All of the above.
Set up a trust for each child.
Which investment would generally be inappropriate for a 25 year old with a traditional
IRA invested for his/her retirement? - Answer- A substantial and permanent investment
in money market mutual funds
What important matter should you always assess before changing jobs - Answer- ) Your
current vesting status on the company stock option plan.
Your current vesting status on the company 401-K plan.
Your current vesting status on the company defined benefit pension plan.
A UCF graduate has a traditional IRA and plans to take the money out prior to age 59 ½
in order to pay off some accumulating credit card debt. The graduate will pay - Answer-
A 10% penalty on the total withdrawn, plus will owe taxes on the amount withdrawn
based on his/her marginal tax rate
Social security payments are always tax free since they are primarily a return of your
money, which was previously deducted from your paycheck. t/f - Answer- false
, Fidelity Investments recently recommended that individuals save at least _____ years of
their final salary before retiring. - Answer- 8
For 2014, estates up to $____________ are generally not subject to federal estate
taxes. - Answer- 5,340,000
A living will or advance health care directive documents your wishes in the event that
you become so physically or mentally disabled that you are unable to act on your own.
t/f - Answer- true
In the event of a dispute, the written terms of the signed sales agreement will prevail
t/f - Answer- True
You should always find your cheapest source of financing for a car prior to actually
visiting a car dealer to shop for cars - Answer- true
Service warranty contracts are generally considered good deals. - Answer- false
what does PITIstand for, and which of these four items are escrowed each month -
Answer- principal and interest (paid to mortgage company), property taxes (escrowed)
and homeowners insurance (escrowed)
most expensive health plan to least expensive - Answer- a. POS (middle cost)
b. PPO (highest cost
c. HMO (lowest cost)
Real estate agent commissions are generally paid by the buyer - Answer- false
life insurance policies that would build "cash value - Answer- whole life
variable life
universal life
3. What do each of these numbers represent in an auto insurance policy: 100/300/50 -
Answer- 100,000 is the maximum that would be paid to one individual in an accident
300,000 is the maximum that would be paid for all claims in a single accident (incident)
50,000 is the maximum property damage that would be paid for an accident
1. A mutual fund's performance is best measured by - Answer- total return
2. If a fund charges an expense ratio of 1% for the current year - Answer- Your fund
returns will be reduced by 1% in the current year
dollar cost averaging is - Answer- *An approach in which you invest the same amount of
money in a fund at regular intervals
AND ANSWERS ALL CORRECT
What document is generally used to name the guardian of your minor children in the
event that both you and your spouse should die? - Answer- a last will and testament
Which type of trust would be used for young adult children, where the deceased parents
wish to ensure that the principal of the trust is maintained for a long period of time? -
Answer- a spendthrift trust
What happens if you die without a will - Answer- the courts will determine how your
assets will be distributed based on state law
What are your options for managing your property after your death if your children are
still relatively young? - Answer- Name a custodian under the Uniform Transfers to
Minors Act.
Set up a "pot or family trust" for your children.
Name a property guardian in your will.
Correct!
All of the above.
Set up a trust for each child.
Which investment would generally be inappropriate for a 25 year old with a traditional
IRA invested for his/her retirement? - Answer- A substantial and permanent investment
in money market mutual funds
What important matter should you always assess before changing jobs - Answer- ) Your
current vesting status on the company stock option plan.
Your current vesting status on the company 401-K plan.
Your current vesting status on the company defined benefit pension plan.
A UCF graduate has a traditional IRA and plans to take the money out prior to age 59 ½
in order to pay off some accumulating credit card debt. The graduate will pay - Answer-
A 10% penalty on the total withdrawn, plus will owe taxes on the amount withdrawn
based on his/her marginal tax rate
Social security payments are always tax free since they are primarily a return of your
money, which was previously deducted from your paycheck. t/f - Answer- false
, Fidelity Investments recently recommended that individuals save at least _____ years of
their final salary before retiring. - Answer- 8
For 2014, estates up to $____________ are generally not subject to federal estate
taxes. - Answer- 5,340,000
A living will or advance health care directive documents your wishes in the event that
you become so physically or mentally disabled that you are unable to act on your own.
t/f - Answer- true
In the event of a dispute, the written terms of the signed sales agreement will prevail
t/f - Answer- True
You should always find your cheapest source of financing for a car prior to actually
visiting a car dealer to shop for cars - Answer- true
Service warranty contracts are generally considered good deals. - Answer- false
what does PITIstand for, and which of these four items are escrowed each month -
Answer- principal and interest (paid to mortgage company), property taxes (escrowed)
and homeowners insurance (escrowed)
most expensive health plan to least expensive - Answer- a. POS (middle cost)
b. PPO (highest cost
c. HMO (lowest cost)
Real estate agent commissions are generally paid by the buyer - Answer- false
life insurance policies that would build "cash value - Answer- whole life
variable life
universal life
3. What do each of these numbers represent in an auto insurance policy: 100/300/50 -
Answer- 100,000 is the maximum that would be paid to one individual in an accident
300,000 is the maximum that would be paid for all claims in a single accident (incident)
50,000 is the maximum property damage that would be paid for an accident
1. A mutual fund's performance is best measured by - Answer- total return
2. If a fund charges an expense ratio of 1% for the current year - Answer- Your fund
returns will be reduced by 1% in the current year
dollar cost averaging is - Answer- *An approach in which you invest the same amount of
money in a fund at regular intervals
