WorksheetsFinancial Foundations
Total questions: 10
Worksheet time: 10mins
Select the best definition of an IRA.
An IRA is a tax-advantaged investing tool set up by individuals for retirement savings
An IRA is a retirement plan offered to you by your employer
An IRA is an investment type with a fixed rate of return
An IRA is a retirement savings plan that guarantees a fixed rate of return
The purpose of insurance is to…
transfer risk
build relationships
build wealth
manage assets
The coverage under renters insurance will cover the costs of the following items EXCEPT:
Your personal belongings
Hotel you have to stay at until your apartment can be repaired
The damage to the building
Small alterations to the property you made at your own expense
What is a premium?
Measures that are taken for disease prevention
An arrangement by which a company provides a guarantee of compensation for a specified loss
A specified amount of money that the insured must pay before an insurance company will pay a claim
The amount you pay to buy an insurance policy
Who typically pays for health care expenses once you have met your deductible?
You pay for all health care expenses
Your insurance pays for all health care expenses
You and your insurance company share the cost of health care expenses
No one pays; once you meet your deductible, your health care expenses are free
Select the TRUE characteristic of a Roth IRA.
There is no limit to the amount you can contribute to a Roth IRA
The Roth IRA has been around longer than the Traditional IRA (the Roth debuted in the 1930s)
The capital gains, interest, & growth of a Roth IRA can be withdrawn tax-free in retirement
You are taxed on the money you withdraw in retirement from your Roth IRA (it is taxed as ordinary income)
By the end of a bond's maturity, the investor will have received…
Only the face value of the issued bond
The face value of the bond issued and interest payments
Only interest payments
Half the face value of the issued bond and interest payments
Why would someone want to have renters insurance if their building owner has insurance?
The building owner's insurance only covers liability. Renters insurance will cover damage to the exterior and structure of the building.
The building owner's insurance only covers the building structure. Renters insurance covers your personal property.
There is no need to get renters insurance if the building owner already has an insurance policy
By law, you must have two types of insurance: landlord insurance and renters insurance
What is the difference between a 401K and IRA? (this will be a short answer on the exam)
A 401K is typically offered through an employer and an IRA is opened on your own.
An IRA is typically offered through an employer and a 401K is opened on your own.
A 401K has a high deductible and an IRA has a low deductible.
An IRA has a high deductible and a 401K has a low deductible.
What are two disadvantages of putting your money into savings accounts, compared to investing? (This will be a short answer question on the exam)
Savings accounts have lower rates of return/interest
Savings accounts have higher interest rates.
Inflation makes money lose purchasing power
Savings accounts have no interest rates.
