6. The amount of the peemium (cost) is determined by the insurer\'s risk- the hi
ID: 2619553 • Letter: 6
Question
6. The amount of the peemium (cost) is determined by the insurer's risk- the higher the risk, the higher the premium. 7. Added protection can be acquired with an umbrella policy which is a supplesent attached to a basic personal liabelity homoowner's policy. 8. A Term life insurance policy insures one's life for a certain period of time, such as ten, fifteen or twenty years 9 Long-term care insurance provides coverage for the care, if someone should become in need of assistance with daily living activities either at home, in an assisted living facility, oe a nursing honse. 10. A benefit for investing in an annuity is income for life. 11. A traditional IRA is tax deductible the ycar it is contributed. 12. Tax exempt and tax deferred mean the same thing. 13. Every homeowner must have homeowner's insurance. 14. A family member could be an Executor of a Trust 15. Trusts are prepared for tax parposes only 16. Trusts are only revocable. 17. Quick source of cash is to liquidate savings 18. A savings account with daily compounding will have higher earnings than an accou with quarterly compounding. 19, A CD account is a checking account that earns interest 20. The price-caming (PE) ratio is the price of a share of stock divided by the corporation's earnings per share of stock 21. Dollar-cost averaging involves consistensly investing in a certain amount of money at regular intervals 22. A family of funds exists when one investment company manages a group of matual fands 23. A stock represents debt to the issuing company. 24. A managed fund is managed by the stockholder. 25. Index mutual funds have lower fees and lower management costs.Explanation / Answer
6. True. Higher the risk involved higher is the cost of insurance
7. True. An umbrella policy provides additional protection for basic policy
8. True. Term Life Insurance policy covers the insured person for a certain period of time.
9.True.
10. True
11. False. T contrinution to traditional IRS is tax deductible every year till the contribution is withdrawn
12. False. Tax exempt means there is no tax payable on income. Tax deferred means is something on which you have to pay tax eventually
13.True
14. True
15. False. Trusts are also prepared to avoid probate and to seamlessley transfer the assets to the heirs.
16.False. Trusts can be revocable or irrecovable
17. True
18. True
19. False. A CD account is a time deposit for a specified period. A checking account is a current account with bank that allows deposits and withdrawls.
20. True
21. True
22. True
23. False. A stock represnts ownership in the issuing company.
24.Fale. A managed fund is managed by an Investment Manager
25. True
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