worksheet

FP/120 FINAL EXAM

1. What is the net amount of income, after allowable deductions, on which income tax is computed?

Earned income

Investment income

Taxable income

Passive income

2. What tax is based on the value of land and buildings; and, is a major source of revenue for local governments?

Excise tax

Real estate property tax

Estate tax

Sales tax

3. All of these are motor vehicle insurance premium factors except for:

Vehicle type

Rating territory

Driver classification

Income tax bracket

4. More than 9 out of 10 homeowners have property insurance. For renters, it is only about:

40%

50%

60%

70%

5. Basic health insurance covers all of the following except for:

Hospital expense

Major medical expense

Surgical expense

Physician expense

6. What can an individual do to reduce healthcare costs?

Eat a balanced diet and keep your weight under control

Avoid smoking and do not drink to excess

Get sufficient rest, relaxation, and exercise

All of the above

7. Which method of estimating your life insurance requirements assumes that you have no children?

The Easy Method

The DINK Method

The Non-Working Spouse Method

The Family Need Method

8. Which type of life insurance policy will never develop a cash value?

Variable Life policy

Whole Life policy

Term Life policy

Universal Life policy

9. Opportunity cost can be defined as

A trade-off of a decision

Failing at goals

Creating financial wisdom

The amount paid for taxes when a purchase is made

10.What are some examples of this Five C category: Conditions?

Unemployment

Recession

Credit rating

All of the above

11.The periodic charge for the use of credit is

A line of credit

Interest

Grace period

Principal

12.As people approach retirement, which of the following holds true for most?

Their choices of investments do not change.

They choose more conservative investments.

They choose more risky investments.

They move all their money into certificates of deposit.