FINAL ONLINE EXAM Salary & understanding employee Benefits 50 MULTIPLE CHOICE

c. 4 only

d. 1, 2, 3 and 4

2. Mark is filling income tax return. He has $2000 deduction and $2000 tax credit. His income tax bracket is 10%. ________ gives him more tax savings.

a. $2000 tax deduction

b. $2000 tax credit

c. 2000 deduction and 2000 credit give him same tax savings

d. Not enough info. To compare

3. Mary’s house is $800,000 and she purchased $560,000 homeowners insurance coverage. Her homeowners insurance requires 80% coinsurance. During a winter storm, the roof was damaged and caused $200,000 loss. How much will her insurance pay?

a. $160,000

b. $200,000

c. $175,000

d. $100,000

4. Sarah bought a $500,000 whole life insurance policy on her husband jerry 10 years ago. They got divorced 3 years ago. Now the policy has $175,000 cash value. Jerry just died. How much will Sarah receive from the insurance policy?

a. Nothing because they got divorced 3 years ago.

b. $500,000

c. $175,000

d. $675,000

5. Which of the following bonds has the lowest default risk?

a. Bond X rated B+

b. Bond Y rated A

c. Bond Z rated AA

d. Bond M rated CCC

6. Which of the following mutual funds is least risky?

a. Emerging market fund

b. Large cap fund

c. Small cap fund

d. Mid cap fund

7. Fanny went to see an in-network doctor in March 2014 and had a medical bill of $2,800. This was her first visit in 2014. Her health insurance has a $4000 deductible and pays 70% for in-network physician and 30% for out-network physician. Her insurance should pay _____.

a. $2,800

b. $1,960

c. $840

d. $0