Eli is a 24-year-old freelance writer. He experiences periods of unemployment and lives on a tight budget. He recently bought term life insurance and declared his parents as the beneficiaries.

Which of the following is true about Eli's situation?

• He will be required to renew the policy every month because of his fluctuating employment.
• His annual insurance premium will stay the same over the life of the insurance policy.
• His parents will have to pay taxes on the death benefits at the time of payout.
• His parents will receive the face value of the policy in the event of Eli's death.

In which of the following scenarios should the individual opt for a financial planner rather than a financial counselor to be most productive?

• Mia wants to clear her accumulating credit card debt.
• Harper wants to find his way out of bankruptcy and minimize damage to his credit report.
• Lucas wants to open multiple car dealerships across the state.
• Colin wants to adjust his expenses to avoid another late mortgage payment.

Joseph invested in a series of stocks that performed well and produced high returns. Soon after, he started making hasty investment choices without the research to back them up.

Which of the following behaviors is Joseph exhibiting in this situation?

• Confirmatory bias
• Hyperbolic discounting
• Loss aversion
• Status quo bias

Thirty-five-year-old Samuel earns $36,000 a year. He's healthy and financially stable. His employer does not offer a pension plan or a defined contribution plan, so he decides to wait to invest any money towards his retirement.

Is Samuel's decision productive? Why or why not?

• It is productive because the latest trends show that pension plans are on the rise and his company might choose to offer one soon.
• It is not productive because he is very close to retirement age and needs to maximize his required savings rate.
• It is not productive because given his good health and financial status, he should take advantage of investing early toward retirement.
• It is productive because he can take advantage of his company's matching contributions while he waits.

How are individuals who invest in bonds protected from fraudulent schemes?

• Individuals buy insurance separately using the same agent for their home, life, and auto.
• The brokerage account is insured through the FDIC.
• The brokerage account associated with the investment is covered through the SIPC.
• Individuals are insured by the company they buy the bonds from.

At which point in life should an individual use their agility skill and start thinking about purchasing a long-term care insurance policy?

• When an individual celebrates their 50th birthday
• When an individual purchases their first home
• When an individual is planning for their wedding expenses
• When an individual applies for higher education

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?

• It is productive because Rachel can withdraw money from the account at any time without penalty.
• It is productive because Rachel's withdrawals from the account after retirement will be tax exempt.
• It is not productive because Rachel cannot claim tax deductions on her contributions toward her retirement account.
• It is not productive because as Rachel's earnings grow over time, she'll likely reach a higher marginal tax rate during retirement.

Which of the following should John do to protect himself from identity theft?

• He should avoid using his personal laptop or phone to check his bank statements.
• He should never give his credit card number over the telephone unless he made the call.
• He should refrain fromgettinga copy of his credit report on a regular basis.
• He should always throw away his credit card receipts and bank statements.