FAM 251

  1. Financial experts estimate that retirees need at least ___ percent of their preretirement income to live comfortably.

    A. 80
  2. Women need to save more moeny for retirement than men because they.

    A. All of these
  3. ____ percent of Americans employed in this country are covered by the Social Security program.

    C. Ninety
  4. The age at which retirees born in 1960 or later will be able to receive full Soical Security benefits will gradually increase until it reaches

    D. 67
  5. An employer-sponsored retirement plan in which the employer or the employee puts money in a retirement account for the employee, and the amount of the retirement benefit depends on how well the investment yields, is called a

    C. Defined-contribution plan.
  6. The type of employer retirement plan in which the benefit is determined by a formula that generally includes the worker's average pay and the number of years worked for the company is called a _____plan.

    B. Defined-benefit
  7. Lina earns $125,000 a year, while Christine earns $115,000 a year. If both are employees and the Social Security wage base is $106,800, Lina pays ____ Social Security taxes than (as) Christine.

    C. Slightly higher
  8. Marketing tax-deferred deposits into a retirement account means that the funds are

    B. Not taxed when deposited but taxed when withdrawn
  9. Upon termination of employment, an employee can keep his or her savings in a tax-sheltered account by transferring the retirement funds from the employer's account to another account without penalty in a protection called.

    B. portability
  10. The primary purpose of the Employee Retirement Income Security Act (ERISA) is to

    D. Regulate employer-sponsored pension plans.
  11. The process by which employees obtain nonforfeitable rights to their retirement benefits that cannot be taken away in case of dismissal or resignation is called.

    D. vesting
  12. A married worker who is to receive income from his or her defined-benefit plan can elect to have a higher check that will stop upon his or her death but only if

    C. his or her spouse consents.
  13. Is a repair expense for rental property rather than a
    capital improvement

    D. Painting the kitchen
  14. Under the depreciation provisions applying to real estate,which of the following statements is false?
    a.The value of the land and property is added
    together and divided by the depreciation factor
    b.The guidelines for residential and commercial
    properties are 27.5 and 39 years, respectively.
    c.Depreciation can be deducted from the cost of the
    asset over the asset’s estimated life.
    d.The irs allows the investor to deduct
    depreciation from income earned
    a.The value of the land and property is added together and divided by the depreciation factor
  15. An option is a contract that
    a.Gives the holder the right to buy or sell a
    specific asset
    b.Specifies a predetermined price
    c.Specifies a time period
    d.All of these
    d. All of these
  16. There is more risk when borrowing to finance a real estate
    investment because
    a.An investor normally makes a smaller down
    b.The investor does not live in
    the property
    c.Most investors finance real estate investments
    with adjustable-rate loans
    d.All of these
    b.The investor does not live inthe property
  17. Investors choose derivatives

    against losses and to take on additional risk by speculating.
    D. Both to reduce risk by hedgingagainst losses and to take on additional risk by speculating.
  18. When an option writer does not own the asset, it is called a

    C. Naked option
Card Set
FAM 251
Exam 4