FCS 3500 - Financial Skills and Planning
Midterm Final Study Guides questions
and answers.
The consumer price index measures: - n
Ans✔
The change in prices in the U.S.
Qs
What is the name of the economic concept that describes the value of the second-
best item or activity that is given up when the best item or activity is chosen? - n
Ans✔
Opportunity cost
Qs
What is the name of the ratio that measures the number of months a household
could meet its expenses using only its monetary assets in the event of an
emergency that caused all income to immediately cease? - n
Ans✔
Liquidity
Qs
Imagine a wealthy married couple. Their names are Casey and Remy. Casey works
at the U of U and Remy works for an advertising company in downtown Salt Lake
City. They have $500,000 deposited in the University branch of Wells Fargo bank in
a joint account. Remy also has $500,000 deposited in the downtown branch of Wells
Fargo in an individual account. Wells Fargo is an FDIC-insured institution. In the
unlikely event that Wells Fargo became insolvent and couldn't pay its depositors,
what level of insurance protection would Casey and Remy, in total, receive? (Hint:
Remember that the standard FDIC insurance amount is $250,000 per depositor, per
insured bank, for each account ownership category.) - n
Ans✔
750,000
,Qs
In 2017 (the year used in your textbook), what were the LOWEST and HIGHEST
marginal income tax rates (or brackets) used by the U.S. government in collecting
income taxes? These marginal tax brackets have changed a lot through history and
changed most recently with the passage of the Tax Cuts and Jobs Act in December,
2017. - n
Ans✔
10% and 39.6%
Qs
Profits from the sale of an asset such as stocks, bonds, or real estate are taxable
and are called: - n
Ans✔
Capital gains
Qs
If you have $100 in your checking account but you charge $120 on your debit card,
this act is called a(an): - n
Ans✔
Overdraft
Qs
Imagine that your debit card was lost or stolen on a Monday. You realize that your
card is missing, but before you can notify the card company, someone has already
rung up charges of over $500. From taking this class, you know how important it is
to notify your debit card issuer about the lost card right away. You do so on Tuesday
of the same week. What is the maximum amount that you can owe for the charges
that were incurred on the card between Monday and Tuesday? - n
Ans✔
$50
Qs
, Imagine a family with three people -- a husband, wife, and one young child. For
their taxes, they are filing jointly. The household's adjustable gross income was
$50,000 in 2017. After accounting for their personal exemptions and taking the
standard deduction, their taxable income (to the nearest thousand) would have
been about: - n
Ans✔
25,000
Qs
When examining a budget, the numbers in it are: - n
Ans✔
Realistic projection of revenues and expenses`
Qs
The phrase "pay yourself first" means: - n
Ans✔
The practice of making saving the first monthly expenditure
Qs
What is the type ("chapter") of bankruptcy in which many of the debtor's assets
may be sold to pay off creditors but after that, almost all of a person's debts are
wiped clean or "forgiven." (Student debt is one of the exceptions.) - n
Ans✔
7
Qs
The person who is designated to receive the face value of a life insurance policy in
the event of the death of the insured person is called the: - n
Ans✔
Beneficiary
Qs
, The occurrence of which of the following events most commonly triggers life
insurance purchases (or increases in life insurance coverage): - n
Ans✔
Birth of a child
Qs
All of the following words or phrases are associated with cash value (sometimes
called "permanent") life insurance EXCEPT: - n
Ans✔
Conditional
Qs
According to your textbook, which of the following is typically NOT a financial need
that should typically be considered at a person's death and therefore may justify
the purchase of life insurance? - n
Ans✔
Offset decrease in standard tax deduction
Qs
Imagine a woman who purchased a cash-value life insurance policy at the age of 25
with a face value of $100,000. She makes all of her payments for 55 years at which
point the policy has a cash value of $70,000. On the way to her exercise class, she
has a heart attack. Which of the following statements is correct about the amount
her beneficiary will receive: - n
Ans✔
$100,000
Qs
What is the correct name for a whole life insurance policy that requires premiums
be paid only for a specified period of time (say, until 65 years old) at which point the
policy is paid up in full and the insurance protection lasts for a person's remaining
lifetime: - n
Ans✔
Limited pay
Midterm Final Study Guides questions
and answers.
The consumer price index measures: - n
Ans✔
The change in prices in the U.S.
Qs
What is the name of the economic concept that describes the value of the second-
best item or activity that is given up when the best item or activity is chosen? - n
Ans✔
Opportunity cost
Qs
What is the name of the ratio that measures the number of months a household
could meet its expenses using only its monetary assets in the event of an
emergency that caused all income to immediately cease? - n
Ans✔
Liquidity
Qs
Imagine a wealthy married couple. Their names are Casey and Remy. Casey works
at the U of U and Remy works for an advertising company in downtown Salt Lake
City. They have $500,000 deposited in the University branch of Wells Fargo bank in
a joint account. Remy also has $500,000 deposited in the downtown branch of Wells
Fargo in an individual account. Wells Fargo is an FDIC-insured institution. In the
unlikely event that Wells Fargo became insolvent and couldn't pay its depositors,
what level of insurance protection would Casey and Remy, in total, receive? (Hint:
Remember that the standard FDIC insurance amount is $250,000 per depositor, per
insured bank, for each account ownership category.) - n
Ans✔
750,000
,Qs
In 2017 (the year used in your textbook), what were the LOWEST and HIGHEST
marginal income tax rates (or brackets) used by the U.S. government in collecting
income taxes? These marginal tax brackets have changed a lot through history and
changed most recently with the passage of the Tax Cuts and Jobs Act in December,
2017. - n
Ans✔
10% and 39.6%
Qs
Profits from the sale of an asset such as stocks, bonds, or real estate are taxable
and are called: - n
Ans✔
Capital gains
Qs
If you have $100 in your checking account but you charge $120 on your debit card,
this act is called a(an): - n
Ans✔
Overdraft
Qs
Imagine that your debit card was lost or stolen on a Monday. You realize that your
card is missing, but before you can notify the card company, someone has already
rung up charges of over $500. From taking this class, you know how important it is
to notify your debit card issuer about the lost card right away. You do so on Tuesday
of the same week. What is the maximum amount that you can owe for the charges
that were incurred on the card between Monday and Tuesday? - n
Ans✔
$50
Qs
, Imagine a family with three people -- a husband, wife, and one young child. For
their taxes, they are filing jointly. The household's adjustable gross income was
$50,000 in 2017. After accounting for their personal exemptions and taking the
standard deduction, their taxable income (to the nearest thousand) would have
been about: - n
Ans✔
25,000
Qs
When examining a budget, the numbers in it are: - n
Ans✔
Realistic projection of revenues and expenses`
Qs
The phrase "pay yourself first" means: - n
Ans✔
The practice of making saving the first monthly expenditure
Qs
What is the type ("chapter") of bankruptcy in which many of the debtor's assets
may be sold to pay off creditors but after that, almost all of a person's debts are
wiped clean or "forgiven." (Student debt is one of the exceptions.) - n
Ans✔
7
Qs
The person who is designated to receive the face value of a life insurance policy in
the event of the death of the insured person is called the: - n
Ans✔
Beneficiary
Qs
, The occurrence of which of the following events most commonly triggers life
insurance purchases (or increases in life insurance coverage): - n
Ans✔
Birth of a child
Qs
All of the following words or phrases are associated with cash value (sometimes
called "permanent") life insurance EXCEPT: - n
Ans✔
Conditional
Qs
According to your textbook, which of the following is typically NOT a financial need
that should typically be considered at a person's death and therefore may justify
the purchase of life insurance? - n
Ans✔
Offset decrease in standard tax deduction
Qs
Imagine a woman who purchased a cash-value life insurance policy at the age of 25
with a face value of $100,000. She makes all of her payments for 55 years at which
point the policy has a cash value of $70,000. On the way to her exercise class, she
has a heart attack. Which of the following statements is correct about the amount
her beneficiary will receive: - n
Ans✔
$100,000
Qs
What is the correct name for a whole life insurance policy that requires premiums
be paid only for a specified period of time (say, until 65 years old) at which point the
policy is paid up in full and the insurance protection lasts for a person's remaining
lifetime: - n
Ans✔
Limited pay
