The Johnsons Change Their Life Insurance Coverage Harry and Belinda Johnson spend $20 per month on life insurance in the form of a premium on a $10,000, paid-at-65 cash-value policy on Harry that his parents bought for him years ago. Belinda has a group term i-surance policy from her employer with a face amount of $200,000. By choosing a group life insurance plan from his menu of employee benefits, Harry now has $100,000 of group term life insurance. Harry and Belinda have decided that, because they have no children, they could reduce their life insurance needs by protecting one another's income for only four years, assuming the survivor would be able to fend for himself or herself after that time. They also realize that their savings fund is so low that it would have no bearing on their life insurance needs. Harry and Belinda are basing their calculations on a projected 4 percent rate of return after taxes and inflation. They also estimate the following expenses: $15,000 for final expenses, $20,000 for readjustment expenses,

and $5,000 for repayment of short-term debts.

Requirement:

(a) Should the $3,000 interest earnings from Harry's trust fund be included in his annual income for the purposes of calculating the likely dollar loss if he were to die? (See the discussions about the Johnsons in Chapter 1 beginning on page 34.) Explain your response.

(b) Based on your response to the previous question, how much more life insurance does Harry need? Use the Run the Numbers worksheet on page 366 to arrive at your answer.

(c) Repeat the calculations to arrive at the additional life insurance needed on Belinda's life.

(d) How might the Johnsons most economically meet any additional life insurance needs you have determined they may have?

e) In addition to their life insurance planning, how might the Johnsons begin to prepare for their retirement years?

Question 2 Which term refers to statistics that are used to test a hypothesis within a small group (sample) to make Not yet answered conclusions about a larger group (population)? Points out of 1.00 F Flag question Select one: a. Inferential Statistics . b. Descriptive Statistics O c. Measurement Statistics O d. Confidence Statistics1. [9 marks] Answer the following, 9 multiple choice questions, Please select one answer for each question. You can also include your justification. This way, even though your answer is wrong, but you may receive 0.5 mark if your justification is reasonable. (I). Fill in the missing words to the quote: "Inferential statistical methods may be described as methods for drawing conclusions about based on _computed from A. statistics, samples, populations B. populations, parameters, samples C. statistics, parameters, samples D. parameters, statistics, populations E. populations, statistics, samplesQUESTION 1 0.25 points Save Answer A random sample of 100 students is taken at LearnAll University and it's found that their average GPA is 3.1. If this information is used to help estimate the average GPA for all students at LearnAll University, which branch of statistics was applied? a Inferential statistics Ob. Population statistics Ce Descriptive statistics Od. Sample statistics QUESTION 2 0.23 points Save Answer A descriptive measure that is computed from a sample is called a: O a parameter. Ob. sample. Ce population. ()d. statistic. QUESTION 3 0.25 points Save Answer Which of the following is a measure of the reliability of a statistical inference? Q& A descriptive statistic. Ob. A sample statistic. Ce A significance level. Od. A population parameter, QUESTION 4 0.25 points The process of using sample statistics to draw conclusions about population parameters is called: O a doing inferential statistics. Ob. finding the significance level. Ce calculating descriptive statistics. Od. calculating the confidence level. QUESTION S 0.25 points Save Answer A researcher at Florida International University (FIU) wants to estimate the average number of credits earned by students last semester at FIU. She randomly selects 750 students from last semester and finds that they averaged 13.75 credits per student. The population of interest to the researcher is: Ca al FIU students errolled last semester. Ob. al FIU students. Ce the 750 FIU students selected at random. O d. all college students