PFLE 6WK2 Review

Why would an attorney suggest new parents make a will?

• The parents need to make end-of-life decisions regarding medical treatments.

• The parents need to assign power of attorney for financial transactions.

• The parents need to name a person to make medical decisions if they are incapacitated.

• The parents need to name a legal guardian for their child and a trustee for their financial assets.

If you have a large sum of money that you do not need access to for a number of years and you want to safely earn the highest interest rate, which of the following accounts should you put your money in?

• regular savings account

• certificate of deposit (CD)

• checking account

• money market account

The _ is the amount you pay to buy different types of insurance.

• premium

• deductible

• co-pay

• policy limit

You must meet your _ for services covered before your insurance starts to pay for services.

• premium

• deductible

• co-pay

• policy limit

When you visit your primary care physician or specialist, you may have to pay a _, which is a set amount per visit.

• co-pay

• premium

• deductible

• policy limit

What is the maximum dollar amount an insurance company will pay for a single event or the lifetime maximum of the insured?

• Premium

• Co-pay

• Policy limit

• Deductible

What does it mean if a charity contribution is tax deductible?

• You can subtract the contribution from the amount of taxes owed.

• You made the contribution to a charity that does not have to pay nay taxes.

• The amount of the contribution can be subtracted from taxable income, which will reduce your taxable income and the amount of taxes that need to be paid.

• The charity will pay the tax on the amount of the contribution rather than the donor.

Which of the following is true about bankruptcy?

• There are no alternatives to filing for bankruptcy if you are struggling to pay your bills.

• Declaring bankruptcy can make it easier to borrow money in the future.

• Only people who are careless with their money need to claim bankruptcy.

• Factors that are beyond a person's control such as medical expenses, job loss, or divorce can lead to bankruptcy.

Which of the following is the most appropriate use of a credit card?

• Using your credit card to pay the down-payment for your new home.

• Using your credit card to buy goods and clothes to build your credit.

• Putting the entire cost of a car on your credit card.

• Using your credit card to pay your rent.

Which statement regarding investing is true?

• You should invest all of capital to make the most of money.

• Investing early generally leads to higher rates of return than investing later.

• Investing in a single stock is the best strategy to build wealth.

• Investing provides a stable and predictable return each month.