WorksheetsTest Review: Investing and Insurance (1-29)
Total questions: 29
Worksheet time: 15mins
Name
Class
Date
1.
The main goal of insurance is
a)
To build wealth by investing into assets
b)
To invest for retirement
c)
To transfer risk from you to your insurance company
d)
To pay yourself with the insurance money you receive from the premiums you receive each month
2.
A premium is...
a)
The amount you pay to the insurance company each month to stay enrolled in your policy
b)
The agreement for an insurance company to take on risk
c)
The maximum amount insurance will cover
d)
The amount you pay out of pocket if an accident happens
3.
The document outlining the monthly premium, insurance limit and deductible is called
a)
Premium
b)
Deductible
c)
Lease
d)
Insurance Policy
4.
Oh no... an accident happened! What is the amount called that you need to pay out of pocket before insurance will cover the rest?
a)
Premium
b)
Deductible
c)
Policy
d)
Limit
5.
What is the term for the maximum amount insurance will pay when an accident happens?
a)
Premium
b)
Deductible
c)
Policy
d)
Limit
6.
How is the premium related to the deductible?
a)
Higher premiums = higher deductible
b)
Lower premiums = lower deductible
c)
Higher premiums = lower deductible
7.
What are the 4 main types of insurance recommended to have once it applys to your stage of life? Select all that apply.
a)
Health
b)
Auto
c)
Life Insurance
d)
Home/Renters Insurance
e)
Identity Theft
8.
At what age are you no longer allowed to be on your parents' health insurance plan?
a)
18
b)
21
c)
26
d)
30
9.
Who should have life insurance?
a)
Someone with pets.
b)
Someone who has to pay for their parents' nursing home.
c)
Someone who has people (kids and/or spouse) who depend on their income to live.
d)
Someone who lives with a roomate and has a steady job.
10.
What auto covereage is required to have on your vehicle across the USA?
a)
Liability
b)
Collision
c)
Theft
d)
Collison
11.
Jack has an insurance policy where he pays $80 per month. In August, he was in an accident where he received a bill for $3,000. The deductible is $500, and the limit is $5,000.
How much will Jack pay in August, assuming he is at fault for the accident?
a)
80
b)
580
c)
3000
d)
5080
12.
Molly has an insurance policy where she pays $100 per month. In December, she was in an accident where she received a bill for $8,000. The deductible is $1,000, and the limit is $5,000.
How much will Molly pay in December, assuming she is at fault for the accident?
a)
100
b)
3,000
c)
3,100
d)
5,100
13.
What could Jack and Molly do to lower their premiums per month?
a)
Increase their deductible
b)
Increase the limit
c)
Decrease their deductible
d)
Decrease the limit
14.
The _____ you drive your car, the _______ you will pay to insure it.
a)
More, More
b)
More, Less
c)
Less, More
15.
The goal for investing should be to invest what percent of your income?
a)
3-5%
b)
5-10%
c)
8-12%
d)
10-15%
16.
True or false: Savings should be for the short-term and is less risky than investing, which also means it will have less growth.
a)
True
b)
False
17.
The amount of money you gain on your investments is called
a)
Risk
b)
Diversify
c)
Expense
d)
Interest
18.
What is the main reason people should start investing early?
a)
Because of compound interest, your money will grow rapidly in the final years of investing.
b)
Starting early allows you to diversify.
c)
Starting early allows you to invest for the short-term.
d)
Because of compound risk, your investments will be less risky.
19.
What is the main reason it is important to diversify?
a)
Diversification helps to spread risk by investing in different types of investments.
b)
The further you are from retirement, the less risk you should take in diversifying.
c)
Diversifying your investments into the same investment helps make sure that one investment performs well.
d)
Diversifying helps to keep your investments very risky, allowing for automatic returns.
20.
True or false: The further you are from retirement, the less risk you can afford to take.
a)
True
b)
False
21.
The type of savings account that allows you to set money aside for a certain amount of time, and then the bank will pay you interest once that time is up.
a)
Certificate of Deposit (CD)/Savings Bond
b)
Bond
c)
401(K)
d)
Mutual Fund
e)
Stocks
22.
When you purchase this investment, you are investing money into one single business. You purchase it on the stock market.
a)
Certificate of Deposit (CD)/Savings Bond
b)
Bond
c)
401(K)
d)
Mutual Fund
e)
Stocks
23.
This type of retirement account is only found through your employer.
a)
Certificate of Deposit (CD)/Savings Bond
b)
Bond
c)
401(K)
d)
Mutual Fund
e)
Stocks
24.
You can earn a fixed-interest rate with this investment, and you will receive the money back when this matures. Your money is lended to a company or the government.
a)
Certificate of Deposit (CD)/Savings Bond
b)
Bond
c)
401(K)
d)
Mutual Fund
e)
Stocks
25.
Investing in multiple stocks all at once, with multiple other investors. This is the most recommended investment Mrs. Doering provided.
a)
Certificate of Deposit (CD)
b)
Bond
c)
401(K)
d)
Mutual Fund
e)
Stocks
26.
Which investment type is the lowest risk option?
a)
401(K)
b)
Bonds
c)
Mutual Funds
d)
Stocks
e)
Certificate of Deposit (CD)/Savings Bond
27.
Which investment type is the highest risk option?
a)
401(K)
b)
Bonds
c)
Mutual Funds
d)
Stocks
e)
Certificate of Deposit (CD)/Savings Bond
28.
Select the two correct anwers of how risk and return are related.
a)
The lower the potential return on an investment, the lower the risk.
b)
Risky options are typically those with a lower interest rate.
c)
Higher interest rate returns mean they are higher risk investments.
d)
A stock with an expected return of 15% is very low in risk.
29.
When is the ideal time to start investing for retirement, and what are the necessary steps to have completed prior?
a)
Start investing as soon as you have a stable job; complete emergency savings and reduce debts first.
b)
Begin investing after purchasing a home; focus on property equity.
c)
Invest only after retirement; prioritize life enjoyment.
d)
Start investing at age 40; focus on building substantial savings.
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