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Business Math Chapter Test 20
In the United States, what percentage of property insurance holders have read their policy? 50% Order the steps for calculating annual life insurance premiums. Step 1. Look up the age of the insured (for females, subtract 3 years) and the type of insurance in Table 20.1. This gives the premium cost per $1,000. Step 2. Divide the amount of coverage by $1,000 and multiply the answer by the premium cost per $1,000. Which insurance policy provides permanent coverage providing the policyholder pays the same premium until death? Straight-Life Insurance: Steve would like to purchase a $1,000,000 straight-life insurance policy. He is 21-Years old at the time the policy is set up. What will be his annual premiums? $6,130 Steve would like to purchase a $1,000,000 20-payment life insurance policy. He is 21-years old at the time the policy is set up. What will be his annual premiums? $8,610 Steve would like to purchase a $1,000,000 20-year endowment policy. He is 21-Years old at the time the policy is set up. What will be his annual premium? $14,350 True or False: Universal, like whole life, has stable or fixed premiums. False Cash value, reduced paid-up insurance, and extended term insurance are examples of: Non-forfeiture values Match the term to the definition; Beneficiary > Person that will receive the insurance proceeds Face Amount > the stated amount of the policy Insurer > the company selling the insurance policy Policyholder: the person receiving the coverage Premium > the cost of the policy paid in periodic payments. Which premium payment frequently would carry the highest cost? Monthly; the more frequent the payment, the higher the processing cost Which insurance type covers only the length of the policy? Term Life Linda purchases a $100,000 five-year term life insurance policy, with her husband as the beneficiary. Linda died in the sixth year without having renewed the policy. How much will her husband receive from the policy? $0 When calculating annual life insurance premiums for a female policyholder, you subtract how many years from the age variable? 3 Which option becomes the default if the policy holder fails to select an option or pay the premium? Option 3: Extended Term Insurance Twenty-Nine-year-old female Constance wished to purchase $100,000 of five-year term life insurance. What table factor will be used in calculating her premiums? 1.85 In the case of coinsurance, the company pays out an amount (more/less) than the value of the loss. less When purchasing a fire insurance policy, owning a brick building will ____ the amount of the premiums. Decrease Chapter Tests 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 Unit Test 01 02 03 04 05 06 Homework Chapter 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 Need A Tutor? Need Homework Help? If a one-year policy is canceled by the policy holder after 3 months, what potion of the premium is retained by the insurance company? 35% A coinsurance policy shares risk with the ____. insurance company Tesslyn decided to cancel her policy after 6 months. Her annual premium was $660. How much is the short-rate premium? $402.60 A 250/500/50 optional policy indicates how much bodily per person coverage is being purchased? $250,000 Which coverage provides protection against damages to your car caused by another moving vehicle? Collision Given that collision insurance pays on the book value of the vehicle, the policy holder should consider ____ the policy after the care is 5 years old. Dropping Given a symbol 6, Age 5, $300 deductible, determine the combined collision and comprehensive premium. Collision = $154 Comprehensive = $67 $221 No fault insurance was expected to (decrease/increase) the cost of premiums. decrease A required insurance that covers physical damages for injury to a person or property Liability Karin purchased optional coverage at 500/1000/100. She is class 10. What are her premiums? 323 A required insurance that covers physical damages for injury to a person or property. Liability If a fire insurance policy costs $1,000 per year, then what would be the cost of a three year policy? $3,000 A vehical accident can cause a/an (Decrease/Increase) in insurance premiums? Increase Jimmy Comfort was interested in pursuing a second career after retiring from the military. He signed up with Twitter to help network with individuals in his field. Within 1 week, he received an offer from a colleague to join her start-up business in Atlanta, Georgia. Along with his salary, he receives 100 shares of stock each month. Assume the stock is worth $4.50 a share. $450 DailyFinance.com reported one $40 share of Coca-Cola's stock bought in 1919, with dividends reinvested, would be worth $9.8 million today. If the price-earnings ratio was 28.42 at that time, what were the annual earnings per share? $1.41 Ryan Neal bought 1,200 shares of Ford at $15.98 per share. Assume a commission of 2% of the purchase price. Ryan sells the stock for $22.25 with the same 2% commission rate. What is the gain or loss for Ryan? $7,674.48 Maytag Company earns $4.80 per share. Today the stock is trading at $59.25. The company pays an annual dividend of $1.40. Calculate the price-earnings ratio: 12.34 Calculate the yield on the stock 2.36% Ryan Neal bought 1,200 shares of Ford at $15.98 per share. Assume a commission of 2% of the purchase price. What is the total cost to Ryan? $19,559.52 Lee Ray bought 130 shares of a mutual fund with a NAV of $13.10. This fund also has a load charge of 8.5% What is the offer price? 14.21 What did lee pay for his investment? $1,847.30 Ron and Madeleine Couple received their 2010 Form 1099-DIV (dividends received) in the amount of $1,585. Ron and Madeleine are in the 28% bracket. What would be their tax liability on the dividends received? $443.80 The stock yield is the monthly dividend divided by the closing price per share. False The NAV is the dollar value of 10 shares of a mutual fund. False A bond quote of 82.25 in dollars is equal to: A bond quote of 82.25 in dollars is equal to $822.50. Loretta Scholten buys nine bonds of Leo Co. 7 ¼ 16 at 103.375. The commission is $3.00 per bond. The current yield to the nearest tenth of a percent is: 7.0%. Jeff Ryan bought 200 shares of BUI for $19.50. Eight weeks later he sold the stock for $20.75. Assuming a 3% commission, his bottom line was a gain of: $8.50 Stock represents shares of ownership in a company. True Dividends in arrears mean: Dividends in arrears mean a specific amount of dividends has not been paid. Stocks are quoted in decimals. True The bond of Tuckpeck is 8¼ 14. The bond traded for a high of 93.25 and closed at 93. The current yield of the bond to the nearest tenth of a percent is: 8.9%. |
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