Discuss the role of financial responsibility laws and describe the two basic types currently employed.
> Briefly describe the two basic sources of return to investors.
> What is meant by the risk-return trade-off? What is the risk-free rate of return?
> What effects do market interest rates have on the price behavior of outstanding bonds?
> Explain the system of bond ratings used by Moody’s and Standard & Poor’s. Why would it make sense to ever buy junk bonds?
> Describe the conversion privilege on a convertible security. Explain how the market price of the underlying common stock affects the market price of a convertible bond.
> What is a convertible bond, and why do investors buy convertible securities?
> Are junk bonds and zero coupon bonds the same? Explain. What are the basic tax features of a tax-exempt municipal bond?
> What’s the difference between a secured bond and an unsecured bond?
> Go to the asset allocation tool provided at the following internet site: http://www.ipers.org/calcs/AssetAllocator.html Enter assumptions that fit your current and anticipated situation and produce an asset allocation recommendation. Then add 20 years to
> Calvin and Danielle Perkins, ages 30 and 28, were recently married in Kansas City. Calvin is an electrical engineer with Analytical Solutions, a computer component design firm. Danielle has a master’s degree in education and teaches at a local middle sch
> Brad Smitham,, a 53-year-old retail store manager earning $75,000 a year, has worked for the same company during his entire 28-year career. Brad was recently laid off and is still unemployed 10 months later, and his 10 months’ severance pay and 6 months’
> What are DRPs, and how do they fit into a stock investment program?
> Summarize the evidence on the potential cost of being out of the stock market during its best months.
> Describe the various types of risk to which investors are exposed.
> Explain the difference between a bull market and a bear market. Discuss the frequency with which returns as bad as those during 2007–2009 occur. How would you characterize the current state of the stock market?
> Contrast the NASDAQ and National Market System with the OTCBB.
> Describe the operations of the NASDAQ market. Compare it with an exchange, such as the NYSE.
> What are regional exchanges, and what role do they play?
> What is the difference between the broker and dealer markets?
> How does a primary market differ from a secondary market? Where are most securities traded: in the primary or the secondary market?
> What, if anything, can be gained from keeping track of your investment holdings?
> Luis Barillas and his wife, Dora, have been married for two years and have a 1-year-old son. They live in Charlotte, North Carolina, where Luis works for Advanced Marketing Analytics. He earns $3,200 per month, of which he takes home $2,300. Luis and his
> Briefly describe the concept of asset allocation and note how it works.
> What is day trading, and how is it different from the more traditional approach to investing?
> Briefly describe several types of online investment tools, and note how they can help you become a better investor.
> Describe the Internet’s impact on the world of investing.
> Briefly describe the DJIA, S&P 400, S&P 500, NASDAQ Composite, Russell 2000, and Dow Jones Wilshire 5000 indexes. Which segments of the market does each measure track?
> What role do market averages and indexes play in the investment process?
> Briefly discuss the four basic types of information that you, as an investor, should follow.
> What is a short sale? Explain the logic behind it. How much could be gained or lost on a short sale investment?
> Describe how the return on an investment is calculated.
> Name and describe three basic types of orders.
> Walter Burton was a self-employed window washer earning approximately $700 per week. One day, while cleaning windows on the eighth floor of the Commercial Bank Building, he tripped and fell from the scaffolding to the pavement below. He sustained severe
> What is arbitration? Does SIPC require the use of arbitration in investor disputes?
> What is the SIPC, and how does it protect investors?
> Describe the role that discount brokers play in carrying out security transactions. To whom are their services especially appealing?
> Briefly discuss the relationship between investing and personal financial planning.
> What are deductibles? Do they apply to either liability or medical payments coverage under the homeowner’s policy?
> Describe replacement-cost coverage and compare this to actual cash value coverage. Which is preferable?
> Describe (a) types of losses, (b) persons, and (c) locations that are covered under a homeowner’s policy.
> What types of property are covered under a homeowner’s policy? When should you consider adding a PPF to your policy? Indicate which of the following are included in a standard policy’s coverage: (a) an African parrot, (b) a motorbike, (c) Avon cosmetics
> Describe how the co-insurance feature works.
> Explain the right of subrogation. How does this feature help lower insurance costs?
> Darrell and Lena Jennings are a two-income couple in their early 30s. They have two children, ages 6 and 3. Darrell’s monthly take-home pay is $3,600, and Lena’s is $4,200. The Jennings feel that, because theyâ&#
> Explain the principle of indemnity. Are any limits imposed on the amount that an insured may collect under this principle?
> Briefly describe key aspects of the claims settlement process, explaining what to do after an accident, the steps in claim settlement, and the role of claims adjustors.
> Differentiate between captive and independent insurance agents. What characteristics should you look for in an insurance agent and an insurance company when you’re buying property or liability insurance?
> What is a personal liability umbrella policy? Under what circumstances might it be a wise purchase?
> Briefly describe the following supplemental property insurance coverage: (a) earthquake insurance, (b) flood insurance, and (c) other forms of transportation insurance.
> Describe the important factors that influence the availability and cost of auto insurance.
> Define no-fault insurance and discuss its pros and cons.
> Explain the nature of (a) automobile collision insurance and (b) automobile comprehensive insurance.
> Briefly explain the major types of coverage available under the personal auto policy (PAP). Which persons are insured under (a) automobile medical payments coverage and (b) uninsured motorist’s coverage?
> Jun Hsieh, a 38-year-old widowed mother of three children (ages 12, 10, and 4), works as a product analyst for Panama Hats. Although she’s covered by a group life insurance policy at work, she feels, based on some rough calculations, that she needs addit
> Briefly explain the fundamental concepts related to property and liability insurance.
> What is the objective of workers’ compensation insurance? Explain its benefits for employees who are injured on the job or become ill through work-related causes.
> Who is eligible for Medicare and Medicaid benefits? What do those benefits encompass?
> Briefly explain how an HMO works. Compare and contrast group HMOs, IPAs, and PPOs.
> Describe the features of traditional indemnity (fee-for-service) plans and explain the differences between them and managed care plans.
> What is group health insurance? Differentiate between group and individual health insurance.
> Why is it important to consider benefit duration when shopping for disability income coverage?
> Describe both the liberal and strict definitions used to establish whether an insured is disabled.
> What is disability income insurance? Explain the waiting-period provisions found in such policies.
> Discuss some of the questions one should ask before buying long-term-care insurance. What guidelines can be used to choose the right policy?
> Grant Tyson, a 27-year-old bachelor living in Arlington, Virginia, has been a high-school teacher for five years. For the past four months, he’s been thinking about buying a Subaru Outback, but he feels that he can’t a
> Describe the differences among long-term-care policies regarding (a) type of care, (b) eligibility requirements, and (c) services covered. List and discuss some other important policy provisions.
> Why should a consumer consider purchasing a long-term care insurance policy?
> What factors have contributed to today’s high costs of health care and health insurance?
> Explain the cost containment provisions commonly found in medical expense plans. How might the provision for second surgical opinions help an insurer contain its costs?
> What are the key provisions of COBRA? How do they relate to continuation of group coverage when an employee voluntarily or involuntarily leaves the insured group?
> Describe these policy provisions commonly found in medical expense plans: (a) deductibles, (b) co-insurance, and (c) coordination of benefits.
> What are the features of a major medical plan? Compare major medical to comprehensive major medical insurance.
> Explain the differences between hospitalization insurance and surgical expense insurance.
> Answer the key questions posed to help you choose a plan, based on your current situation. What type of plan do you think will best suit your needs?
> Discuss possible sources of health insurance available to supplement employer sponsored health insurance plans.
> At age 19, Zoe Trainor is in the middle of her second year of studies at a community college in Charlotte. She has done well in her course work; majoring in pre-business studies, she currently has a 3.75 grade point average. Zoe lives at home and works p
> Explain what factors should be considered in evaluating available employer-sponsored health insurance plans.
> Explain four methods for controlling the risks associated with health care expenses.
> What are the key provisions of the ACA? How is it likely to affect your health care insurance?
> What is term life insurance? Describe some common types of term life insurance policies.
> What are some factors that underwriters consider when evaluating a life insurance application? Which, if any, apply to you or your family members?
> Name and explain the most common financial resources needed after the death of a family breadwinner.
> Discuss the two most commonly used ways to determine a person’s life insurance needs.
> Explain the circumstances under which a single college graduate would or would not need life insurance. What life-cycle events would change this initial evaluation, and how might they affect the graduate’s life insurance needs?
> Explain the purpose of underwriting. What are some factors that underwriters consider when evaluating a life insurance application?
> Describe the key elements of an insurance policy illustration and explain what a prospective client should focus on in evaluating an illustration.
> A year after declaring bankruptcy and moving with her daughter back into her parents’ home, June Maffeo is about to get a degree in nursing. As she starts out in a new career, she also wants to begin a new life—one built on a solid financial base. June w
> Explain the following clauses often found in life insurance policies: (a) multiple indemnity clause, (b) disability clause, and (c) suicide clause. Give some examples of common exclusions.
> What do non forfeiture options accomplish? Differentiate between paid-up insurance and extended term insurance.
> Explain the basic settlement options available for the payment of life insurance proceeds upon a person’s death.
> What is a beneficiary? A contingent beneficiary? Explain why it’s essential to designate a beneficiary for your policy.
> Define (a) risk avoidance, (b) loss prevention, (c) loss control, (d) risk assumption, and (e) an insurance policy. Explain their interrelationships.
> Briefly describe the insurance company ratings assigned by A. M. Best, Moody’s, Fitch, and Standard & Poor’s. Why is it important to know how a company is rated? What ratings would you look for when selecting a life insurance company? Explain.
> Briefly describe the steps to take when you shop for and buy life insurance.
> Explain how group life insurance differs from standard term life insurance. What do employees stand to gain from group life?
> What is universal life insurance? Explain how it differs from whole life and variable life insurance.
> Describe the different types of whole life policies. What are the advantages and disadvantages of whole life insurance?
> Felipe and Lucia Ramirez are a newly married couple in their mid-20s. Conrad is a senior at a state university and expects to graduate in the summer of 2015. Lucia graduated last spring with a degree in marketing and recently started working as a sales r
> Explain how the “paid-up insurance” component of a whole life insurance policy works.
> Explain how whole life insurance offers financial protection to an individual throughout his or her life.
