UGBA 96 UPDATED Exam Questions and
CORRECT Answers
d - Correct Answer- Long-Term Disability Insurance usually replaces
a. 50% of your retirement savings
b. 100% of your income
c. Social Security
d. Up to 2/3 of your income
a - Correct Answer- What is typically not covered by a homeowner's insurance policy?
a. Personal vehicle
b. Personal property found in dwelling
c. Additional living expenses related to loss of dwelling
d. Dwelling
d - Correct Answer- For a homeowner's insurance policy, the insurance-to-value ratio refers
to:
a. The ratio of the cost of the insurance policy to the replacement cost of your home
b. The ratio of the insurance coverage provided by your policy to the purchase value of your
home
c. The ratio of the cost of the insurance policy to the current value of your home
d. The ratio of the insurance coverage provided by your policy to the replacement cost of the
home
a, d - Correct Answer- Which of the following are included in the typical definition of
dwelling in a homeowner's policy?
a. A patio that is attached to your home
b. A storage shed in your backyard
c. A separate guest cottage in your backyard
d. Your house
d - Correct Answer- Renter's Insurance will insure
,a. Rent payments should you be unable to make rent
b. The land, building, and personal property at the address being rented
c. Only the most valuable items in an apartment
d. All the personal property in your apartment, but not the apartment itself
b - Correct Answer- Suppose your roommate slips on the rug in your apartment, falls, and
breaks her arm. She has medical costs and she loses two weeks of wages because she can't
work. What will renters insurance pay for (if you have it)?
a. Her medical expenses, subject to your deductible, but will not pay for lost wages
b. The renters insurance will pay nothing
c. Her medical expenses with no deductibles (deductibles do not apply to medical expenses)
AND will pay for lost wages
d. Her medical expenses, subject to your deductible, AND lost wages
b - Correct Answer- Disability insurance plans usually will not insure your entire income
because insurance companies are concerned about
a. Correlated risks
b. Moral hazard
c. Adverse selection
d. Systematic risk
b - Correct Answer- For most people who need life insurance, which of the following is the
best type of policy?
a. Whole life insurance
b. Term life insurance
c. Accidental death insurance
d. Universal life insurance
c - Correct Answer- The Onet Interest Profiler does which of the following:
a. Maps your interests to hobbies
b. Helps you find a job that pays well
c. Maps your interests to careers
, d. Maps your abilities to careers
c - Correct Answer- Payscale.com collects data on salaries primarily from ____
a. Corporations that report the salaries of their workers
b. Bureau of Labor Statistics
c. Self reported income of website users
d. US census
b - Correct Answer- Onet collects data on salaries primarily from ____
a. Corporations that report the salaries of their workers
b. Bureau of Labor Statistics
c. Self reported income of website users
d. US census
d - Correct Answer- Which of the following is the LEAST RELEVANT when considering the
financial return on the degree for the typical student?
a. Lost income while you are in school
b. The length of the degree
c. The tuition you will pay
d. How much you enjoy the subject
e. The career prospects when you graduate
d - Correct Answer- Suppose you buy a home for $500,000. You make a $100,000
downpayment and borrow $400,000 in a 30 year fixed rate mortgage. A year later, you move
to another city for work and decide to sell your home. Real estate prices have appreciated 2%
during that year and you are able to sell your home for $510,000. However, real estate
commissions, taxes and fees cost you 8% of the selling price. For simplicity let's ignore the
small amount of principal you paid on your mortgage during that year. How much of your
down payment will you get back?
a. About 50%
b. A little over 90%
c. All of it plus $10,000
d. About 70%
CORRECT Answers
d - Correct Answer- Long-Term Disability Insurance usually replaces
a. 50% of your retirement savings
b. 100% of your income
c. Social Security
d. Up to 2/3 of your income
a - Correct Answer- What is typically not covered by a homeowner's insurance policy?
a. Personal vehicle
b. Personal property found in dwelling
c. Additional living expenses related to loss of dwelling
d. Dwelling
d - Correct Answer- For a homeowner's insurance policy, the insurance-to-value ratio refers
to:
a. The ratio of the cost of the insurance policy to the replacement cost of your home
b. The ratio of the insurance coverage provided by your policy to the purchase value of your
home
c. The ratio of the cost of the insurance policy to the current value of your home
d. The ratio of the insurance coverage provided by your policy to the replacement cost of the
home
a, d - Correct Answer- Which of the following are included in the typical definition of
dwelling in a homeowner's policy?
a. A patio that is attached to your home
b. A storage shed in your backyard
c. A separate guest cottage in your backyard
d. Your house
d - Correct Answer- Renter's Insurance will insure
,a. Rent payments should you be unable to make rent
b. The land, building, and personal property at the address being rented
c. Only the most valuable items in an apartment
d. All the personal property in your apartment, but not the apartment itself
b - Correct Answer- Suppose your roommate slips on the rug in your apartment, falls, and
breaks her arm. She has medical costs and she loses two weeks of wages because she can't
work. What will renters insurance pay for (if you have it)?
a. Her medical expenses, subject to your deductible, but will not pay for lost wages
b. The renters insurance will pay nothing
c. Her medical expenses with no deductibles (deductibles do not apply to medical expenses)
AND will pay for lost wages
d. Her medical expenses, subject to your deductible, AND lost wages
b - Correct Answer- Disability insurance plans usually will not insure your entire income
because insurance companies are concerned about
a. Correlated risks
b. Moral hazard
c. Adverse selection
d. Systematic risk
b - Correct Answer- For most people who need life insurance, which of the following is the
best type of policy?
a. Whole life insurance
b. Term life insurance
c. Accidental death insurance
d. Universal life insurance
c - Correct Answer- The Onet Interest Profiler does which of the following:
a. Maps your interests to hobbies
b. Helps you find a job that pays well
c. Maps your interests to careers
, d. Maps your abilities to careers
c - Correct Answer- Payscale.com collects data on salaries primarily from ____
a. Corporations that report the salaries of their workers
b. Bureau of Labor Statistics
c. Self reported income of website users
d. US census
b - Correct Answer- Onet collects data on salaries primarily from ____
a. Corporations that report the salaries of their workers
b. Bureau of Labor Statistics
c. Self reported income of website users
d. US census
d - Correct Answer- Which of the following is the LEAST RELEVANT when considering the
financial return on the degree for the typical student?
a. Lost income while you are in school
b. The length of the degree
c. The tuition you will pay
d. How much you enjoy the subject
e. The career prospects when you graduate
d - Correct Answer- Suppose you buy a home for $500,000. You make a $100,000
downpayment and borrow $400,000 in a 30 year fixed rate mortgage. A year later, you move
to another city for work and decide to sell your home. Real estate prices have appreciated 2%
during that year and you are able to sell your home for $510,000. However, real estate
commissions, taxes and fees cost you 8% of the selling price. For simplicity let's ignore the
small amount of principal you paid on your mortgage during that year. How much of your
down payment will you get back?
a. About 50%
b. A little over 90%
c. All of it plus $10,000
d. About 70%
