FIN 101 EXAM 2 PRACTICE TEST EXAM QUESTIONS AND
ANSWERS
The Thomson's house burned to the ground! They felt they were adequately covered. Their car (market
value $10,000) was in the garage and totally destroyed. How much will they be reimbursed for their
auto from their HO-3 policy?
Replacement value of house: 80,000
ACV coverage on the house: 60,000
Deductible: 300 - CORRECT ANSWER✅✅$0
The fund whose main objective is to simply match the market known as a(n) _________ fund. - CORRECT
ANSWER✅✅index
Shrek is purchasing a used honda accord. The dealership is offering an annual interest rate of 12% on a 2
year loan. the cost of the car is $10,000. What will Shrek's monthly payment be? (yellow sheet) -
CORRECT ANSWER✅✅$470.73
Marilyn is purchasing a new car for $30,000. She can make a $3,000 down payment, and will make 60
monthly payments. What is the principal balance of the loan? - CORRECT ANSWER✅✅$27,000
A market order would be transacted at the - CORRECT ANSWER✅✅best price when the order is
entered
The appropriate yield to maturity when the average income is $3,000, the average capital gain is $6, the
average investment is $27, and the investment is held for 3 years is - CORRECT ANSWER✅✅33%
Common types of property that are subject to internal limits on homeowner's policies include
a. clothing
b. musical instruments
c. furniture
, d. jewelry
e. all of the above - CORRECT ANSWER✅✅d. jewelry
From the standpoint of the person buying insurance, the central purpose of insurance should be: -
CORRECT ANSWER✅✅to transfer risks of serious losses
Risk and return are _______________ related - CORRECT ANSWER✅✅directly
what is the relationship between the interest rate and bond price? As the bond price goes up, interest
rates____ - CORRECT ANSWER✅✅decrease
Given a $250 annual deductible, a $5,000 lid on the coinsurance, 80/20 coinsurance, and a $250,000
policy limit, how much of a $27,500 medical bill will be paid by the insured? - CORRECT
ANSWER✅✅$5,250
Bond prices and interest rates are _____ related - CORRECT ANSWER✅✅inversely
The Smith family owns 200 shares of Elta stock. the company declared a 5% stock dividend. The Smiths
now own - CORRECT ANSWER✅✅210 shares
Nick has a comprehensive health care policy with a $250 per calendar year deductible and 80%-20%
with a maximum $1,000 copayment cap per calendar year. In January, Nick had a $600 claim which the
insurance company paid $280. Nick experiences another unrelated claim in October resulting in total
bills of $5,000. How much will Nick have to pay for the second claim? - CORRECT ANSWER✅✅$930
The Thomson's house burned down! They felt they we adequately covered. Their car (market value
$10,000) was in the garage and totally destroyed. How much will the Thomson's be reimbursed for their
home?
Replacement Value of house: 80,000
ACV coverage on house: 60,000
Deductible: 300 - CORRECT ANSWER✅✅$59,700
ANSWERS
The Thomson's house burned to the ground! They felt they were adequately covered. Their car (market
value $10,000) was in the garage and totally destroyed. How much will they be reimbursed for their
auto from their HO-3 policy?
Replacement value of house: 80,000
ACV coverage on the house: 60,000
Deductible: 300 - CORRECT ANSWER✅✅$0
The fund whose main objective is to simply match the market known as a(n) _________ fund. - CORRECT
ANSWER✅✅index
Shrek is purchasing a used honda accord. The dealership is offering an annual interest rate of 12% on a 2
year loan. the cost of the car is $10,000. What will Shrek's monthly payment be? (yellow sheet) -
CORRECT ANSWER✅✅$470.73
Marilyn is purchasing a new car for $30,000. She can make a $3,000 down payment, and will make 60
monthly payments. What is the principal balance of the loan? - CORRECT ANSWER✅✅$27,000
A market order would be transacted at the - CORRECT ANSWER✅✅best price when the order is
entered
The appropriate yield to maturity when the average income is $3,000, the average capital gain is $6, the
average investment is $27, and the investment is held for 3 years is - CORRECT ANSWER✅✅33%
Common types of property that are subject to internal limits on homeowner's policies include
a. clothing
b. musical instruments
c. furniture
, d. jewelry
e. all of the above - CORRECT ANSWER✅✅d. jewelry
From the standpoint of the person buying insurance, the central purpose of insurance should be: -
CORRECT ANSWER✅✅to transfer risks of serious losses
Risk and return are _______________ related - CORRECT ANSWER✅✅directly
what is the relationship between the interest rate and bond price? As the bond price goes up, interest
rates____ - CORRECT ANSWER✅✅decrease
Given a $250 annual deductible, a $5,000 lid on the coinsurance, 80/20 coinsurance, and a $250,000
policy limit, how much of a $27,500 medical bill will be paid by the insured? - CORRECT
ANSWER✅✅$5,250
Bond prices and interest rates are _____ related - CORRECT ANSWER✅✅inversely
The Smith family owns 200 shares of Elta stock. the company declared a 5% stock dividend. The Smiths
now own - CORRECT ANSWER✅✅210 shares
Nick has a comprehensive health care policy with a $250 per calendar year deductible and 80%-20%
with a maximum $1,000 copayment cap per calendar year. In January, Nick had a $600 claim which the
insurance company paid $280. Nick experiences another unrelated claim in October resulting in total
bills of $5,000. How much will Nick have to pay for the second claim? - CORRECT ANSWER✅✅$930
The Thomson's house burned down! They felt they we adequately covered. Their car (market value
$10,000) was in the garage and totally destroyed. How much will the Thomson's be reimbursed for their
home?
Replacement Value of house: 80,000
ACV coverage on house: 60,000
Deductible: 300 - CORRECT ANSWER✅✅$59,700
