CFS 345 COMPREHENSIVE EXAM ACTAUL QUESTIONS
AND ANSWERS SURE A+
✔✔Who issues bonds? - ✔✔corporations, states, cities, and goverments
✔✔Who should have a high percentage of their investments in large-cap funds, the
aggressive or conservative investor? - ✔✔the aggressive investor because they are
comfortable with fluctuation
✔✔_____________- do not guarantee a specific dollar amount at retirement; kept in an
account in your name - ✔✔defined-contribution plan
✔✔___________- do guarantee an income for the rest of your life after your retire; kept
in account managed by employer - ✔✔defined-benefit plan
✔✔What is a 401(k) plan? - ✔✔an employer-sponsered retirement plan that gives a
special tax break to employees saving for retirement
✔✔What is one distinction between traditional IRAs and Roth IRAs? - ✔✔traditional IRA
contributions are tax deductible and Roth IRAs are not
✔✔How do people accumulate social security benefits? - ✔✔receive benefits based on
calculation of years worked, income earned during years worked, and age at retirement
✔✔When would an individual be covered under COBRA? - ✔✔when they don't have the
benefit of a group plan through work
✔✔What is a fee-for-service health plan? - ✔✔allows you to go to any doctor you
choose; traditional plan with most flexibility
✔✔What is an HMO? - ✔✔an association of health care professionals and medical
facilities that sell a fixed package of health care services for a fixed price
✔✔What is a PPO? - ✔✔combine the managed-care aspects of an HMO with the
flexibility of a fee-for-service plan
✔✔What is the purpose of disability insurance? - ✔✔protects your income-producing
ability when you're unable to work due to illness or injury
✔✔What is a Durable Power of Attorney? - ✔✔allows you to appoint a trusted agent to
manage your financial affairs if you become unable to manage them yourself
✔✔What is a trust? - ✔✔a legal arrangement allowing for the transfer of property to a
trustee who holds it for the benefit of another person
, ✔✔7 types of insurance: - ✔✔life, health, disability, auto, homeowners/rental, umbrella,
and long-term care
✔✔Types of insurance:
________- purpose is to replace your income; 5-10x annual salary; doesn't build up
cash value; not an asset - ✔✔life
✔✔Two general types of whole life insurance:
____________- investment kept separate from pure insurance; yield on investment
pays insurance policy - ✔✔universal
✔✔Two general types of whole life insurance:
_____________- give you some say in what your cash value will be invested in -
✔✔variable
✔✔Types of insurance:
______________- everyone needs this; ACA allow < 26 year olds to be covered by
parents; HMO; POS; PPO; COBRA - ✔✔health
✔✔Most ___________ plans replace up to 60% of your income up to a max of $5,000-
$10,000 per month - ✔✔disability insurance
✔✔Owning ________ is owning part of the company - ✔✔stock
✔✔____________ are fixed income securities - ✔✔bonds
✔✔Interest on bonds is usually paid ______________ - ✔✔quarterly
✔✔In 1928, just before the Stock Market Crash of 1929 Calvin Coolidge said Americans
can "___________________________" - ✔✔anticipate the future with optimism
✔✔The crisis of 2008 is often referred to as the ________________ - ✔✔subprime
crash
✔✔What is a NINJA loan? - ✔✔mortgages that were no income, no job or assets
✔✔What are two reasons that banks made NINJA loans? - ✔✔force loans onto people
who would never repay them; earn a fee on the origination and another fee when they
were sold to someone else
✔✔When banks wouldn't lend to each other anymore, that led to what type of problem?
- ✔✔massive liquidity crisis
AND ANSWERS SURE A+
✔✔Who issues bonds? - ✔✔corporations, states, cities, and goverments
✔✔Who should have a high percentage of their investments in large-cap funds, the
aggressive or conservative investor? - ✔✔the aggressive investor because they are
comfortable with fluctuation
✔✔_____________- do not guarantee a specific dollar amount at retirement; kept in an
account in your name - ✔✔defined-contribution plan
✔✔___________- do guarantee an income for the rest of your life after your retire; kept
in account managed by employer - ✔✔defined-benefit plan
✔✔What is a 401(k) plan? - ✔✔an employer-sponsered retirement plan that gives a
special tax break to employees saving for retirement
✔✔What is one distinction between traditional IRAs and Roth IRAs? - ✔✔traditional IRA
contributions are tax deductible and Roth IRAs are not
✔✔How do people accumulate social security benefits? - ✔✔receive benefits based on
calculation of years worked, income earned during years worked, and age at retirement
✔✔When would an individual be covered under COBRA? - ✔✔when they don't have the
benefit of a group plan through work
✔✔What is a fee-for-service health plan? - ✔✔allows you to go to any doctor you
choose; traditional plan with most flexibility
✔✔What is an HMO? - ✔✔an association of health care professionals and medical
facilities that sell a fixed package of health care services for a fixed price
✔✔What is a PPO? - ✔✔combine the managed-care aspects of an HMO with the
flexibility of a fee-for-service plan
✔✔What is the purpose of disability insurance? - ✔✔protects your income-producing
ability when you're unable to work due to illness or injury
✔✔What is a Durable Power of Attorney? - ✔✔allows you to appoint a trusted agent to
manage your financial affairs if you become unable to manage them yourself
✔✔What is a trust? - ✔✔a legal arrangement allowing for the transfer of property to a
trustee who holds it for the benefit of another person
, ✔✔7 types of insurance: - ✔✔life, health, disability, auto, homeowners/rental, umbrella,
and long-term care
✔✔Types of insurance:
________- purpose is to replace your income; 5-10x annual salary; doesn't build up
cash value; not an asset - ✔✔life
✔✔Two general types of whole life insurance:
____________- investment kept separate from pure insurance; yield on investment
pays insurance policy - ✔✔universal
✔✔Two general types of whole life insurance:
_____________- give you some say in what your cash value will be invested in -
✔✔variable
✔✔Types of insurance:
______________- everyone needs this; ACA allow < 26 year olds to be covered by
parents; HMO; POS; PPO; COBRA - ✔✔health
✔✔Most ___________ plans replace up to 60% of your income up to a max of $5,000-
$10,000 per month - ✔✔disability insurance
✔✔Owning ________ is owning part of the company - ✔✔stock
✔✔____________ are fixed income securities - ✔✔bonds
✔✔Interest on bonds is usually paid ______________ - ✔✔quarterly
✔✔In 1928, just before the Stock Market Crash of 1929 Calvin Coolidge said Americans
can "___________________________" - ✔✔anticipate the future with optimism
✔✔The crisis of 2008 is often referred to as the ________________ - ✔✔subprime
crash
✔✔What is a NINJA loan? - ✔✔mortgages that were no income, no job or assets
✔✔What are two reasons that banks made NINJA loans? - ✔✔force loans onto people
who would never repay them; earn a fee on the origination and another fee when they
were sold to someone else
✔✔When banks wouldn't lend to each other anymore, that led to what type of problem?
- ✔✔massive liquidity crisis
