D/S Unit 4 Review Question Preview (ID: 34354)


D/S Final Review. TEACHERS: click here for quick copy question ID numbers.

A reason that people need to save and invest is to:
a) Enable their money to make money
b) Increase the money supply
c) Be able to get anything they want
d) Have an opportunity to talk with financial service providers

Company Xʹs board of directors has decided to issue a portion of its earnings to its shareholders.If you own stock in Company X, you can expect to receive a(n):
a) Dividend
b) Investment
c) Buy-out
d) Yield

Savings accounts and money-market accounts are most appropriate for:
a) Emergency funds and short-term goals
b) Earning a high rate of return
c) Long-term investments like retirement
d) Savings accounts and money-market accounts should be avoided since they carry high risk

The benefit of diversification in your investments is:
a) Reduced risk
b) Increased return
c) Reduced tax liability
d) Increased risk

A young investor willing to take moderate risk for above-average growth would be most interested in:
a) Mutual funds
b) Single Stocks
c) Bonds
d) Real estate

Which of the following would not be a huge financial risk (and, therefore would not require insurance) if you had a full emergency fund of $500 or more?
a) You lose your cell phone
b) A medical emergency
c) Your identity gets stolen
d) A car accident

The purpose of insurance is to:
a) Transfer financial risk
b) Develop a savings plan
c) Provide an investment opportunity
d) All of these

A person becomes self-insured when:
a) Their kids are grown, they have no debt, and they have fully funded retirement
b) They have no debt
c) They own their own business
d) Everyone should have term life insurance regardless of age or financial well-being

Which of the following statements about disability insurance is false?
a) Disability insurance is not necessary if you have a good health insurance policy.
b) A longer elimination period will lower your premium cost.
c) Your coverage should be for 65% of your income.
d) After college, short-term disability should be covered by your emergency fund of three to six monthsʹ worth of expenses, stay

You are involved in a two-car accident in which you are at fault. The other driver is injured and your insurance covers the medical expenses of the victim. This type of insurance coverage is called:
a) Liability
b) Comprehensive
c) Uninsured motorist protection
d) Collision

Single stocks and mutual funds carry the same amount of risk.
a) False
b) True
c)
d)

You can start investing with a small amount of money.
a) True
b) False
c)
d)

Good investment portfolios are extremely complex.
a) False
b) True
c)
d)

If you leave a job and have money saved in your employerʹs retirement plan, always roll that money into an IRA using a direct rollover, which allows you to avoid taxes and penalties.
a) True
b) False
c)
d)

Saving and investing have nothing to do with the amount of money you make.
a) True
b) False
c)
d)

After high school, you should have the following types of insurance: auto, renterʹs, health and long-term care insurance.
a) False
b) True
c)
d)

Renterʹs insurance is not necessary if you donʹt have a lot of expensive things.
a) False
b) True
c)
d)

Duplicate coverage, or any extra insurance on top of your existing insurance, is not necessary.
a) True
b) False
c)
d)

Any insurance with cash value or that combines insurance with investments is a bad idea.
a) True
b) False
c)
d)

Good identity theft protection includes restoration services.
a) True
b) False
c)
d)

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