Unit 2 Review

The Rule of 72 provides a quick formula for computing how long it will take to double money invested at a given interest rate.

• True

• False

Risk transfer might be achieved by purchasing insurance.

• True

• False

Health insurance provides income to a person who is unable to work due to a work-related illness or injury.

• True

• False

A budget is similar to a cash flow statement because both are used to record estimated income and expenses.

• True

• False

Bank checking and savings accounts are insured up to the legal limit of $250,000 per depositor per bank.

• True

• False

The first step in the decision-making process is to

• Compare choices

• Define the problem or goal

• Gather information

• Consider the opportunity cost

____________ is a common internet scam that uses email messages to deceive you into disclosing personal information.

• Identify theft

• Web fraud

• Phishing

• Hacking

An auto insurance policy provides liability coverage of 100/300/50. What is the amount of property damage covered by this policy?

• $300,000

• $100,000

• $50,000

• $0

__________ is a government-sponsored health insurance program funded by employee payroll deduction and matching employer contributions.

• Medicare

• Medicaid

• Medigap

• All of these

Homeowners insurance covers property owners' losses from all the following except

• Depreciation

• Hazards

• Crimes

• Liability