GEB 3006 FINAL EXAM QUESTIONS & ANSWERS
It is illegal for an employer to review your credit report as part of the application process.
- Answer -False
Employer benefits can be worth up to ___ of your base salary. - Answer -50%
Generally the two main employer benefits with the highest value are: - Answer -
Retirement and health plans
Assume you have a 401-K plan and that your employer requires you to stay five years
to "vest" in the plan. If you leave the company in three years then, - Answer -You will
lose the amount your employer contributed to the plan plus the earnings, but you will
retain your contributions and the earnings thereon
Which of the following health plans offers the most choice in doctors and has the
highest cost? - Answer -PPO
Which of the following health plans generally requires that you first see your primary
care physician and remain within a restricted network of doctors? - Answer -HMO
Which of the following is TRUE? - Answer -Flexible spending and health savings
accounts are shown as reductions to your W-2 income, and thus save federal taxes
After enrolling in your primary health insurance plan, which of the following is the next
MOST important insurance that all employees should sign up for during open
enrollment? - Answer -Disability insurance
Assume the following:
Gross salary = $120,000
Employee contributions to 401-K = $12,000
Employer match to 401-K = $5,000
Flexible spending account savings = $2,000
Health insurance premiums paid by employee = $3,000
Health insurance paid directly by employer = $8,000
What is the W-2 taxable income? - Answer -$103,000
An employer offers a 401-K plan under the following terms:
, Employer will match 80% of all contributions up to 6%.
If an employee saves 10% of his/her salary, then the employer will match ___ of their
salary. - Answer -4.8%
Employees without a pension plan should try to save at least _____ of their salary
(including employer 401-K plan matches) throughout their working careers. - Answer -
10-15%
Fidelity Investments recommends that individuals without pensions have about ___
times their salary at age 67 in order to have a sufficient amount of money to retire. -
Answer -10
Assume you receive a tax free parking benefit worth $1,000/year. What is the pretax
equivalent of this benefit for individuals in a 15% marginal tax bracket? - Answer -
$1,176
Assume you receive a taxable car allowance worth $1,000/year. What is the after tax
equivalent of this benefit for individuals in a 25% marginal tax bracket? - Answer -$750
Fidelity Investments recommends that individuals without pensions have about ___
times their salary at age 30 in order to have a sufficient amount of money to retire. -
Answer -1
Assume you are in a 35% marginal tax bracket.
If you saved $2,000 in your flexible savings account, you will save ___ in taxes. -
Answer -$700
At what age will you become eligible for Medicare? - Answer -65
At what age are you eligible for early Social Security? - Answer -62, and the amount
received is a discounted benefit compared to the full retirement benefit
Which of the following statements is FALSE? - Answer -If you accepted a chance to
"resign" instead of being fired, then you are still eligible for state unemployment
benefits.
Which health plan has a low cost but high deductible? - Answer -HDHP
Social Security estimates that once the assets of the Social Security Trust Fund are
depleted, they could continue to pay _____ of current benefits with the cash collected
from payroll taxes each year. - Answer -79%
Which of the following statements is TRUE with respect to Exchange Traded Funds
(ETFs)?
It is illegal for an employer to review your credit report as part of the application process.
- Answer -False
Employer benefits can be worth up to ___ of your base salary. - Answer -50%
Generally the two main employer benefits with the highest value are: - Answer -
Retirement and health plans
Assume you have a 401-K plan and that your employer requires you to stay five years
to "vest" in the plan. If you leave the company in three years then, - Answer -You will
lose the amount your employer contributed to the plan plus the earnings, but you will
retain your contributions and the earnings thereon
Which of the following health plans offers the most choice in doctors and has the
highest cost? - Answer -PPO
Which of the following health plans generally requires that you first see your primary
care physician and remain within a restricted network of doctors? - Answer -HMO
Which of the following is TRUE? - Answer -Flexible spending and health savings
accounts are shown as reductions to your W-2 income, and thus save federal taxes
After enrolling in your primary health insurance plan, which of the following is the next
MOST important insurance that all employees should sign up for during open
enrollment? - Answer -Disability insurance
Assume the following:
Gross salary = $120,000
Employee contributions to 401-K = $12,000
Employer match to 401-K = $5,000
Flexible spending account savings = $2,000
Health insurance premiums paid by employee = $3,000
Health insurance paid directly by employer = $8,000
What is the W-2 taxable income? - Answer -$103,000
An employer offers a 401-K plan under the following terms:
, Employer will match 80% of all contributions up to 6%.
If an employee saves 10% of his/her salary, then the employer will match ___ of their
salary. - Answer -4.8%
Employees without a pension plan should try to save at least _____ of their salary
(including employer 401-K plan matches) throughout their working careers. - Answer -
10-15%
Fidelity Investments recommends that individuals without pensions have about ___
times their salary at age 67 in order to have a sufficient amount of money to retire. -
Answer -10
Assume you receive a tax free parking benefit worth $1,000/year. What is the pretax
equivalent of this benefit for individuals in a 15% marginal tax bracket? - Answer -
$1,176
Assume you receive a taxable car allowance worth $1,000/year. What is the after tax
equivalent of this benefit for individuals in a 25% marginal tax bracket? - Answer -$750
Fidelity Investments recommends that individuals without pensions have about ___
times their salary at age 30 in order to have a sufficient amount of money to retire. -
Answer -1
Assume you are in a 35% marginal tax bracket.
If you saved $2,000 in your flexible savings account, you will save ___ in taxes. -
Answer -$700
At what age will you become eligible for Medicare? - Answer -65
At what age are you eligible for early Social Security? - Answer -62, and the amount
received is a discounted benefit compared to the full retirement benefit
Which of the following statements is FALSE? - Answer -If you accepted a chance to
"resign" instead of being fired, then you are still eligible for state unemployment
benefits.
Which health plan has a low cost but high deductible? - Answer -HDHP
Social Security estimates that once the assets of the Social Security Trust Fund are
depleted, they could continue to pay _____ of current benefits with the cash collected
from payroll taxes each year. - Answer -79%
Which of the following statements is TRUE with respect to Exchange Traded Funds
(ETFs)?
