Fin 008 - Personal Finance and Investments » Winter 2021 » Quiz 4

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Question #1
The 401k plans give employees a pre-tax or tax-deferred way to save for retirement.
A.     
B.   TRUE
C.   FALSE
Question #2
Disability insurance insures your income against an accident or illness that impairs your earning ability.
A.   TRUE
B.   FALSE
Question #3
An advantage of mutual funds that they have built in diversification.
A.   FALSE
B.   TRUE
Question #4
A starting point for your estimates of retirement expenses is
A.   how long you will need to support yourself in retirement.
B.   the rate at which your savings compound.
C.   the way you want to live when you retire.
D.   the effects of inflation on your costs.
E.   your current level of spending.
Question #5
Issuers of stock
A.   promise returns.
B.   expect investors to share in profits and losses.
C.   also issue bonds.
D.   must trade in a public stock exchange.
E.   pay dividends whether or not there is a profit.
Question #6
When you invest in stocks you
A.   pay dividends.
B.   pay dividends, buy a share of a corporation and sell equity for liquidity
C.   pay dividends and sell equity for liquidity
D.   sell equity for liquidity.
E.   buy a share of a corporation.
Question #7
Your risk tolerance represents
A.   your wealth or net worth.
B.   your ability or willingness to take chances.
C.   your return objective.
D.   the amount of money you stand to lose.
E.   the amount of time separating you from your money.
Question #8
Uninsurable risks that offer a chance of loss or gain are called
A.   risk avoidance.
B.   speculative risks.
C.   pure risks.
D.   trade-offs.
E.   risk shifts.
Question #9
Hazards covered by the homeowner's policy include all the following EXCEPT
A.   floods and earthquakes.
B.   explosions.
C.   smoke damage.
D.   riots.
E.   damage caused by aircraft or vehicles.

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