FAM 251

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Author:
shayraney
ID:
80908
Filename:
FAM 251
Updated:
2011-04-20 21:29:45
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FAM
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Description:
Exam 4
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  1. Financial experts estimate that retirees need at least ___ percent of their preretirement income to live comfortably.
    A. 55
    B. 80
    C. 100
    D. 60
    B. 80
    (this multiple choice question has been scrambled)
  2. Women need to save more moeny for retirement than men because they.
    A. Get less from Social Security.
    B. Get fewer retirement benefits from employer plans.
    C. Live Longer
    D. All of these
    D. All of these
    (this multiple choice question has been scrambled)
  3. ____ percent of Americans employed in this country are covered by the Social Security program.
    A. Ninety
    B. Seventy-five
    C. Fifty
    D. Sixty
    A. Ninety
    (this multiple choice question has been scrambled)
  4. The age at which retirees born in 1960 or later will be able to receive full Soical Security benefits will gradually increase until it reaches
    A. 66
    B. 67
    C. 65
    D. 72
    B. 67
    (this multiple choice question has been scrambled)
  5. An employer-sponsored retirement plan in which the employer or the employee puts money in a retirement account for the employee, and the amount of the retirement benefit depends on how well the investment yields, is called a
    A. Tax-sheltered annuity
    B. Defined-contribution plan
    C. Defined-benefit plan
    D. Profit-sharing plan
    B. Defined-contribution plan.
    (this multiple choice question has been scrambled)
  6. The type of employer retirement plan in which the benefit is determined by a formula that generally includes the worker's average pay and the number of years worked for the company is called a _____plan.
    A. Defined-benefit
    B. noncontributory
    C. Defined-contribution
    D. Contributory
    A. Defined-benefit
    (this multiple choice question has been scrambled)
  7. Lina earns $125,000 a year, while Christine earns $115,000 a year. If both are employees and the Social Security wage base is $106,800, Lina pays ____ Social Security taxes than (as) Christine.
    A. Slightly lower
    B. Significantly higher
    C. Slightly higher
    D. The same
    C. Slightly higher
    (this multiple choice question has been scrambled)
  8. Marketing tax-deferred deposits into a retirement account means that the funds are
    A. never taxed
    B. Taxed both when deposited and when withdrawn but not while held in the acount
    C. Taxed when deposited but not taxed when withdrawn.
    D. Not taxed when deposited but taxed when withdrawn
    D. Not taxed when deposited but taxed when withdrawn
    (this multiple choice question has been scrambled)
  9. Upon termination of employment, an employee can keep his or her savings in a tax-sheltered account by transferring the retirement funds from the employer's account to another account without penalty in a protection called.
    A. vesting
    B. severance
    C. sheltering
    D. portability
    D. portability
    (this multiple choice question has been scrambled)
  10. The primary purpose of the Employee Retirement Income Security Act (ERISA) is to
    A. Regulate employer-sponsored pension plans.
    B. Collect taxes on retirement benefits.
    C. Require employer-sponsored pension plans for large companies.
    D. Regulate employer-sponsored pension plans and require employer-sponsored pension plans for large companies.
    A. Regulate employer-sponsored pension plans.
    (this multiple choice question has been scrambled)
  11. The process by which employees obtain nonforfeitable rights to their retirement benefits that cannot be taken away in case of dismissal or resignation is called.
    A. catch-up
    B. vesting
    C. funding
    D. integration
    B. vesting
    (this multiple choice question has been scrambled)
  12. A married worker who is to receive income from his or her defined-benefit plan can elect to have a higher check that will stop upon his or her death but only if
    A. he or she contributed an extra amount into the plan while employed.
    B. The employer allows such a situation
    C. His or her spouse consents
    D. The spouse works for the same firm
    C. his or her spouse consents.
    (this multiple choice question has been scrambled)
  13. Is a repair expense for rental property rather than a
    capital improvement
    A.Painting the kitchen
    B.Adding a new patio
    C.Remodeling the garage into a game room
    D.Building a sidewalk
    A. Painting the kitchen
    (this multiple choice question has been scrambled)
  14. Under the depreciation provisions applying to real estate,which of the following statements is false?
    a.The value of the land and property is added
    together and divided by the depreciation factor
    b.The guidelines for residential and commercial
    properties are 27.5 and 39 years, respectively.
    c.Depreciation can be deducted from the cost of the
    asset over the asset’s estimated life.
    d.The irs allows the investor to deduct
    depreciation from income earned
    a.The value of the land and property is added together and divided by the depreciation factor
  15. An option is a contract that
    a.Gives the holder the right to buy or sell a
    specific asset
    b.Specifies a predetermined price
    c.Specifies a time period
    d.All of these
    d. All of these
  16. There is more risk when borrowing to finance a real estate
    investment because
    a.An investor normally makes a smaller down
    payment
    b.The investor does not live in
    the property
    c.Most investors finance real estate investments
    with adjustable-rate loans
    d.All of these
    b.The investor does not live inthe property
  17. Investors choose derivatives
    A.Both to reduce risk by hedging
    B.To take on additional risk by speculating
    C.To invest directly in the asset
    D.To reduce risk by hedging against losses
    against losses and to take on additional risk by speculating.
    A.Both to reduce risk by hedgingagainst losses and to take on additional risk by speculating.
    (this multiple choice question has been scrambled)
  18. When an option writer does not own the asset, it is called a
    A.Warrant
    B.Naked option
    C.Covered option
    D.Straddle
    B. Naked option
    (this multiple choice question has been scrambled)

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