FiCEP Final: CUNA Review Exam Questions And
Answers Verified 100% Correct
How do riders affect whole life insurance policies? - ANSWER -Riders offer
options to expand or adapt coverage as the member's needs or circumstances
change.
Which of the following riders provides benefits to a member who becomes
disabled? - ANSWER -A premium waiver for disability rider covers premiums
while a member is disabled.
What is the meaning of the phrase "buy term and invest the difference"? -
ANSWER -People should buy a term life policy, compare the cost to a whole life
policy, and then invest the amount they saved.
For people without life insurance, now is usually the best time to buy because.. -
ANSWER -insurance availability declines as people grow older and their health
declines.
How does life insurance improve a family's financial stability? - ANSWER -It
provides funds to support a family after the loss of a key wage.
What are four things members should have in place before establishing an
investment program? - ANSWER -An emergency fund, adequate insurance, a
savings plan, and a positive credit history.
What is the recommended advice regarding saving and investing? - ANSWER -
Saving should come first, followed by investing.
What are the advantages of having savings? - ANSWER -Savings offer an insured
principal easily accessed for short-term needs.
Why is compound interest so important? - ANSWER -It gives the member a
return on both the original principal and all the interest that accrues over time.
What is the "rule of 72" used to determine? - ANSWER -The number of years
required to double the investment: 72 divided by the current interest rate.
, What is the rate of return? - ANSWER -The percentage gain in value on your
investment.
What is the definition of dividend? - ANSWER -The portion of a company's
profits paid to stockholders.
Why is a savings account considered a liquid asset? - ANSWER -The balance can
be easily converted to cash.
How do investors define risk? - ANSWER -Risk is the chance that you will lose
the original investment.
What is the rate of return on a 401(k) if your employer matches every $1 you
invest with a deposit of 25 cents? - ANSWER -25%
Select the statement that describes two benefits of investing in mutual funds. -
ANSWER -Mutual funds typically combine diversification with the ability to
invest with relatively small deposits.
Choose the correct ranking of investments based on typical performance in order
of lower risk to higher risk. - ANSWER -Savings account, life insurance, and
mutual funds.
Which investment vehicle has traditionally had the highest rate of return? -
ANSWER -Common stocks over the last 50 years
When the investor's goal is the preserve the principal, what type of investment
vehicle should be selected? - ANSWER -The investor should select the safest
investment options available.
What should the financial counselor consider when making referrals to a specific
investment advisor? - ANSWER -The investment advisor's compensation,
professional designation, and training.
Which of the following statements accurately describes the belief that "renting is
like throwing money away"? - ANSWER -It's a myth.
When is owning a home the best option? - ANSWER -When you are committed
to the area and have a down payment.
, How many homeowners nationwide routinely decide not to take the tax deduction
for mortgage interest and property tax because they have minimal expenses, want
to file a basic return, own their home outright, or fail to qualify for the deduction? -
ANSWER -About 1/2 of homeowners.
Which statement correctly describes a benefit of home ownership? - ANSWER -
Home ownership is a forced savings program that builds assets through mandatory
monthly payments.
How can you reduce the cost of owning or renting a place to live? - ANSWER -
Get a roommate or tenant, either on your own or through a HomeShare program.
Which factors are likely to influence your home costs for utilities, maintenance,
and insurance? - ANSWER -The location, size, and style of your home.
How can homeowners lower the cost of obtaining insurance? - ANSWER -By
finding discounts and doing comparison shopping.
If you drop your thermostat by one degree, how much will it cut your heating
costs? - ANSWER -3%
How does excessive use of bathroom or kitchen fans affect energy bills? -
ANSWER -They suck heated or cooled air out of the home, thus increasing utility
bills.
Where do the greatest heating losses occur in a typical home? - ANSWER -
Through unsealed leaks in the ceiling, walls, foundation, and other areas.
How many american families spend $20 or more every month to rent storage
space? - ANSWER -1 in 10 families
For the average American family, how much of the budget is given to
transportation costs? - ANSWER -Almost 1/5 of the budget.
What's the best way for a typical car owner to save money on maintenance? -
ANSWER -By learning to perform basic maintenance tasks, but leaving more
complex tasks to expert mechanics.
Answers Verified 100% Correct
How do riders affect whole life insurance policies? - ANSWER -Riders offer
options to expand or adapt coverage as the member's needs or circumstances
change.
Which of the following riders provides benefits to a member who becomes
disabled? - ANSWER -A premium waiver for disability rider covers premiums
while a member is disabled.
What is the meaning of the phrase "buy term and invest the difference"? -
ANSWER -People should buy a term life policy, compare the cost to a whole life
policy, and then invest the amount they saved.
For people without life insurance, now is usually the best time to buy because.. -
ANSWER -insurance availability declines as people grow older and their health
declines.
How does life insurance improve a family's financial stability? - ANSWER -It
provides funds to support a family after the loss of a key wage.
What are four things members should have in place before establishing an
investment program? - ANSWER -An emergency fund, adequate insurance, a
savings plan, and a positive credit history.
What is the recommended advice regarding saving and investing? - ANSWER -
Saving should come first, followed by investing.
What are the advantages of having savings? - ANSWER -Savings offer an insured
principal easily accessed for short-term needs.
Why is compound interest so important? - ANSWER -It gives the member a
return on both the original principal and all the interest that accrues over time.
What is the "rule of 72" used to determine? - ANSWER -The number of years
required to double the investment: 72 divided by the current interest rate.
, What is the rate of return? - ANSWER -The percentage gain in value on your
investment.
What is the definition of dividend? - ANSWER -The portion of a company's
profits paid to stockholders.
Why is a savings account considered a liquid asset? - ANSWER -The balance can
be easily converted to cash.
How do investors define risk? - ANSWER -Risk is the chance that you will lose
the original investment.
What is the rate of return on a 401(k) if your employer matches every $1 you
invest with a deposit of 25 cents? - ANSWER -25%
Select the statement that describes two benefits of investing in mutual funds. -
ANSWER -Mutual funds typically combine diversification with the ability to
invest with relatively small deposits.
Choose the correct ranking of investments based on typical performance in order
of lower risk to higher risk. - ANSWER -Savings account, life insurance, and
mutual funds.
Which investment vehicle has traditionally had the highest rate of return? -
ANSWER -Common stocks over the last 50 years
When the investor's goal is the preserve the principal, what type of investment
vehicle should be selected? - ANSWER -The investor should select the safest
investment options available.
What should the financial counselor consider when making referrals to a specific
investment advisor? - ANSWER -The investment advisor's compensation,
professional designation, and training.
Which of the following statements accurately describes the belief that "renting is
like throwing money away"? - ANSWER -It's a myth.
When is owning a home the best option? - ANSWER -When you are committed
to the area and have a down payment.
, How many homeowners nationwide routinely decide not to take the tax deduction
for mortgage interest and property tax because they have minimal expenses, want
to file a basic return, own their home outright, or fail to qualify for the deduction? -
ANSWER -About 1/2 of homeowners.
Which statement correctly describes a benefit of home ownership? - ANSWER -
Home ownership is a forced savings program that builds assets through mandatory
monthly payments.
How can you reduce the cost of owning or renting a place to live? - ANSWER -
Get a roommate or tenant, either on your own or through a HomeShare program.
Which factors are likely to influence your home costs for utilities, maintenance,
and insurance? - ANSWER -The location, size, and style of your home.
How can homeowners lower the cost of obtaining insurance? - ANSWER -By
finding discounts and doing comparison shopping.
If you drop your thermostat by one degree, how much will it cut your heating
costs? - ANSWER -3%
How does excessive use of bathroom or kitchen fans affect energy bills? -
ANSWER -They suck heated or cooled air out of the home, thus increasing utility
bills.
Where do the greatest heating losses occur in a typical home? - ANSWER -
Through unsealed leaks in the ceiling, walls, foundation, and other areas.
How many american families spend $20 or more every month to rent storage
space? - ANSWER -1 in 10 families
For the average American family, how much of the budget is given to
transportation costs? - ANSWER -Almost 1/5 of the budget.
What's the best way for a typical car owner to save money on maintenance? -
ANSWER -By learning to perform basic maintenance tasks, but leaving more
complex tasks to expert mechanics.
