Fin 301 Test 2 True/False – Flashcards
19 test answers
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Stafford loans may be subsidized or unsubsidized
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True
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The basic purpose of insurance is to protect you from the results of accidental losses.
answer
True
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All types of life insurance offer a cash surrender value
answer
False
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One should typically name both primary and contingent beneficiaries for life insurance policies
answer
True
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When you stop making premium payments on a whole life policy, the protection is immediately forfeited
answer
False
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If a loan has a prepayment penalty, there will be an additional cost to repay the loan early
answer
True
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Borrowing to pay for a college education is a legitimate use of credit
answer
True
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Life insurance death benefits are not subject to income Tax
answer
True
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Investing is considered a short term activity that involves the buying and selling of securities
answer
False
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Whole life policies typically provide a high investment rate of return
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False
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Commercial banks are generally more selective in granting loans than finance companies.
answer
True
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Spreading risk among large number of people is a major principle of life insurance
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True
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A no load, low expense mutual fund is not a smart choice for investing
answer
False
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Term Insurance is generally the most economical form of life insurance for young families
answer
True
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The needs approach to evaluate the right amount of life insurance is the most accurate method to determine the proper amount of death benefits.
answer
True
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