1. Terry has medical coverage under Medicare. From this fact alone, you can infer it's likely that Terry is A. age 65 or over. B. poor. C. in a long-term care facility. D. disabled.

2. Tom is a family farmer with less than $3 million in debt. He wants to know if there are any chapters in the bankruptcy code specifically geared to debtors such as him. You would recommend to him Chapter A. 12. B. 7. C. 13. D. 11.

3. Carl is in a car accident caused by Frank. Carl was able to collect damages and medical expenses from his own insurance company even though fault had yet to be determined. Carl probably lives in a state that requires __________ insurance. A. collision B. uninsured motorist C. no-fault D. liability

4. Bob is concerned that Social Security retirement income won't be enough to meet his needs. He is looking for a financial product that would provide him with steady retirement income later in life. You would recommend A. annuity. B. term life insurance. C. universal life insurance. D. straight life insurance.

5. Tom purchases a life insurance policy and then joins the military. Tom is deployed in a combat zone and killed by enemy soldiers. Tom's wife applies for the insurance proceeds. Which of the following is most likely? A. The insurance company won't pay, as military benefits supersede any civilian life insurance. B. The insurance company will pay double because the death was during war. C. The insurance company will pay only after the military certifies that Tom would have been honorably discharged had he completed his term of service. D. The insurance company won't pay, as death due to war activities is usually exempted from the risk insured against.

6. Tom contacts an attorney about filing bankruptcy. The attorney says that Tom will have to pass a means test. This suggests the attorney is planning to file Tom's bankruptcy under Chapter A. 12. B. 11. C. 13. D. 7.

7. Tom is a consumer with a lot of credit card debt who wants to get a clean start and get rid of all of his debts. If he qualifies, the best chapter in bankruptcy for Tom is Chapter A. 11. B. 7. C. 13. D. 12.

8. Bob forgot to make his premium payment this month. The policy A. is terminated, but the insurance company must provide coverage under a new policy if Bob reapplies. B. lapses, but can be reinstated by making the late payment in all cases. C. lapses, but can be reinstated by making the late payment if the policy or state law provides a grace period. D. is terminated in all cases.

9. Liza borrows money from First Finance Company for miscellaneous expenses. Liza and First Finance agree that Liza's diamond ring shall serve as collateral for the loan. Two weeks later, Liza takes a loan from Second Finance Company listing the same diamond ring as collateral. Neither First Finance nor Second Finance takes any additional steps. Liza defaults on both loans. Second Finance demands possession of the diamond ring and Liza gives it to them. Which of the following statements regarding this set of facts is true? A. First Finance Company possesses the priority claim because it loaned the money to Liza before Second Finance. B. Second Finance Company possesses the priority claim because it perfected its security interest first. C. Both First Finance and Second Finance possess equal rights in the diamond ring and must equally divide any proceeds from the sale of the ring. D. Neither finance company possesses a valid security interest in the diamond ring, and neither possesses any remedy due to the failure to file a financing statement.

10. State and federal exemptions are applicable to bankruptcy. Which of the following statements is true in all states? A. The debtor will use either state or federal exemptions. B. The debtor will use both federal and state exemptions. C. The debtor must use state exemptions. D. The debtor must use federal exemptions.

11. Sally and Carl have received a foreclosure notice. The foreclosure sale is set to take place in seven days. They contact a bankruptcy attorney. The attorney tells them the foreclosure proceedings will be halted, at least temporarily, if they file bankruptcy, due to the A. automatic stay. B. state exemptions. C. federal exemptions. D. means test.

12. Victor applies for life insurance. On the application, when asked if he had ever been diagnosed with cancer, he falsely said no. Later Victor died, and the insurance company found out about the previous diagnosis of cancer and refused to pay. What were the most likely grounds? A. Misrepresentation B. Concealment C. Failure to pay premiums D. Estoppel

13. Tom's life insurance has no cash surrender value. It must be A. limited-payment life insurance. B. term life insurance. C. endowment. D. straight life.

14. Tom gave a mortgage to Big Bank. Big Bank failed to record the mortgage. Then Tom gave a mortgage to Second Bank. Second Bank recorded the mortgage and didn't know about the mortgage to Big Bank. After Second Bank recorded, Big Bank recorded its mortgage. After both mortgages are recorded, Tom defaults on both debts. Which of the following statements is true? A. Big Bank has a first mortgage. B. Second Bank has a first mortgage. C. Tom doesn't owe the debt to Big Bank because Big Bank failed to record the mortgage promptly. D. If these are the only two mortgages on the property, they'll share the proceeds pro-rata based on the amount due each.

15. Charlie files Chapter 11 bankruptcy. __________ creditors have the right to vote on the plan. A. Impaired B. All C. No D. Secured

16. An intentional withholding of a fact that would be of material importance to the insurer's decision to issue a policy is called a/an A. misrepresentation. B. fraudulent concealment. C. estoppel. D. adhesion contract. End of exam

17. Candy purchase a life insurance policy. Six months later, Candy falls into a severe depression and kills herself. Which of the following statements is true? A. The life insurance will pay double under the double indemnity provision. B. Life insurance will pay nothing, as there was death by suicide less than two years after purchasing the policy. C. Life insurance will pay unless the suicide was an assisted suicide and the person assisting was the beneficiary of the policy. D. Life insurance will pay proceeds if there's evidence that Candy suffered from a diagnosed psychological condition that accounts for why she committed suicide.

18. Carl gave Ted a mortgage. Which of the following is most likely collateral for the mortgage? A. Inventory in a business B. Personal property C. A vehicle D. Real property

19. Terry parks his car outside the restaurant and goes inside to eat. When he returns, his car has been damaged by vandalism. Terry's insurance company will pay for the repairs if Terry has __________ insurance. A. comprehensive B. no-fault C. collision D. liability

20. Carl applies for fire insurance for his house. Before the application is processed, Carl's house burns down. Carl will have coverage if the insurance company A. doesn't find out about the fire until after the policy issues. B. makes coverage retroactive. C. chooses to accept the application. D. issued a binder.