1) Joy takes out a term life insurance policy for 20 years and names Eva, her sister, the beneficiary.

What criterion should be fulfilled for Eva to receive the insurance payment?

A) Eva receives the insurance payment at the end of 20 years even if Joy does not die.

B) Eva receives the insurance payment only if Joy dies within the 20-year term period.

C) Eva receives the insurance payment only if Joy dies after the 20-year period.

D) Eva receives the insurance payment if Joy develops a life-threatening disease during the 20-year period.

2) Rachel, 28, a software engineer, decides to opt for a traditional IRA instead of a Roth IRA for her retirement plan. Her plan includes 75% stock which is high-risk, high-reward.

Is this a productive choice of plans for Rachel? Why or why not?

A) It is not productive because as Rachel's earnings grow over time, she'll likely reach a higher marginal tax rate during retirement.

B) It is productive because Rachel's withdrawals from the account after retirement will be tax exempt.

C) It is productive because Rachel can withdraw money from the account at any time without penalty.

D) It is not productive because Rachel cannot claim tax deductions on her contributions toward her retirement account.