Review 2 Final Exam

Define the following mutual funds below. Which one is the riskiest?

• Mega-cap

• Large-cap

• Mid-cap

• Small-cap

What is a Universal Life Insurance Policy? Is it a good investment tool?

• A universal life insurance policy is a type of permanent life insurance that offers flexibility in premium payments and death benefits. It also includes a savings component that earns interest. It is generally not considered a good investment tool compared to other options like mutual funds or retirement accounts due to higher fees and complexity.

• A universal life insurance policy is a type of temporary life insurance that offers flexibility in premium payments and death benefits. It is generally considered a good investment tool compared to other options like mutual funds or retirement accounts due to lower fees and complexity.

• A universal life insurance policy is a type of permanent life insurance that offers fixed premium payments and death benefits. It is generally considered a good investment tool compared to other options like mutual funds or retirement accounts due to higher fees and complexity.

• A universal life insurance policy is a type of temporary life insurance that offers fixed premium payments and death benefits. It is generally not considered a good investment tool compared to other options like mutual funds or retirement accounts due to lower fees and complexity.

Define the following below: CD (Certificate of Deposit)

• A savings certificate with a fixed maturity date and specified interest rate.

• A financial product that provides a series of payments made at equal intervals, often used for retirement income.

• A fixed income instrument representing a loan made by an investor to a borrower.

• Basic goods used in commerce that are interchangeable with other goods of the same type.

How available your money is to access is called ______________.

• Liquidity

• Solvency

• Profitability

• Stability

If your investment has a return of 1.5% and inflation for the period of your investment was 1.5% then you broke even? Yes or No?

• Yes

• No

What is the difference between investing your money and working for your money?

• Investing your money involves putting your money into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit. Working for your money means earning income through labor or services provided.

• Investing your money involves earning income through labor or services provided. Working for your money means putting your money into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit.

• Investing your money involves putting your money into a savings account. Working for your money means earning income through labor or services provided.

• Investing your money involves earning income through labor or services provided. Working for your money means putting your money into a savings account.

Define the following types of life insurance policies below. Which is the only one we said you should buy?

• Whole

• Universal

• Variable

• Term

When do you really need to purchase life insurance?

• When you have dependents who rely on your income, such as a spouse, children, or other family members.

• When you are single and have no dependents.

• When you are retired and have no dependents.

• When you are a student with no income.

List the 7 baby steps according to Dave Ramsey on how to manage your money right.

• Save $1,000 for your starter emergency fund. Pay off all debt (except the house) using the debt snowball.

• Save $1,000 for your starter emergency fund. Invest 15% of your household income into retirement.

• Pay off all debt (except the house) using the debt snowball. Save $1,000 for your starter emergency fund.

• Invest 15% of your household income into retirement. Save $1,000 for your starter emergency fund.

Your mortgage payment should not be more than 25% of your monthly net income. If your monthly net income is $3400, what should your mortgage payment be?

• $850

• $900

• $1000

• $1100