Question
Which of the following statements is true of gifts? Gifts are an involuntary transfer of funds from the donor's assets after their death. Donors are
Which of the following statements is true of gifts?
Gifts are an involuntary transfer of funds from the donor's assets after their death.
Donors are obligated to pay taxes only if they gift money to charities.
It is mandatory for the donor to file a gift tax return if the amount paid to the recipient is more than $15,000.
It is the recipient's obligation to file a tax return if the gift is monetary.
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 not productive because he is very close to retirement age and needs to maximize his required savings rate.
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 productive because he can take advantage of his company's matching contributions while he waits.
It is not productive because given his good health and financial status, he should take advantage of investing early toward retirement.
Marina wants to protect herself from financial loss as a result of identity theft.
What advice should you give her?
She should use the same password for her credit card, debit card, and bank accounts.
She should carry her Social Security number and credit card details wherever she goes.
She should reconcile her bank accounts monthly and report any problems to her bank or creditor immediately.
She should never hesitate to respond to calls that ask her to confirm her personal details.
Hallie, a 35-year-old influencer, uses her problem solving skill to choose a Roth IRA to save for retirement instead of a traditional IRA.
Is this a productive choice of plans for Hallie? Why or why not?
It is productive because her initial contribution to the account is tax deductible.
It is productive because she can withdraw her contributions to the account at any time without paying tax on the amount.
It is not productive because she will pay a penalty if she withdraws any contributions to the account before age 59 1/2.
It is not productive because the earnings in the account are not tax-deferred.
Which of the following is true of long-term disability insurance?
It only pays benefits if the injury was incurred on the job.
Policies replace salary for three, six, or 12 months.
The person must be over 65 years of age to be eligible.
Most policies extend up to age 65.
Suppose an investment scheme offers you a high return at a low risk.
What does an offerlike this indicate?
It indicates that the scheme might be deceptive orfraudulent.
It indicates that investors have faith in the success of the investment scheme.
It indicates that the risk will increase if new investors invest in the scheme.
It indicates that the money in the scheme is managed by financial experts.
Cole has zero savings as most of his earnings are used to pay for all his monthly expenses. He has permanent life insurance and pays a $350 premium every month.
Which of the following is a feature of permanent life insurance that could also benefit Cole's financial situation?
Cole's health is also insured under this type of policy, and it reduces his expenses on his medical bills.
In this policy, a portion of the premium is stored as cash reserves that can be withdrawn or borrowed by Cole.
The interest generated by the insurance's cash reserve is paid to Cole every month.
In Cole's policy, the cost of the premiums, although high in the beginning, decreases as the years progress.
How are individuals who invest in bonds protected from fraudulent schemes?
Individuals are insured by the company they buy the bonds from.
The brokerage account associated with the investment is covered through the SIPC.
The brokerage account is insured through the FDIC.
Individuals buy insurance separately using the same agent for their home, life, and auto.
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