Explain how you would eliminate funds inappropriate for your investment goals.
> Now that you have read this chapter on vehicle and other major purchases, what do you recommend to David and Lisa Cosgrove regarding: 1. How to search for a vehicle to replace Alyssa’s? 2. Whether to replace Alyssa’s vehicle with a new or used vehicle? 3
> Review Figures 13-1 and 13-2, and record in writing an investment plan to fund your retirement, presumably one of your own long-term goals. Figures 13-1: Figures 13-2: Figure 13-1 Long-Term Rates of Return on Investments (Annualized returns since 1
> What does a health care proxy achieve?
> What is a living will and what does it try to accomplish?
> Offer some reasons why people should create advance directive documents.
> What does a durable power of attorney provide, and can it be changed?
> Describe the term release and explain why signing a release too soon might work to your disadvantage.
> Describe what you should do to file a claim most effectively when involved in an automobile accident.
> What is the best way to establish documentation for potential losses to your personal property?
> Who would use a Keogh rather than a SEP-IRA to save for retirement?
> List two differences between a Roth IRA and a traditional IRA.
> Now that you have read this chapter on credit cards and consumer loans, what would you recommend to Zachary Cochrane regarding: 1. His approach to using credit cards, including the number of cards he has? 2. Estimating the credit card interest charges he
> Summarize the importance of low-cost investment fees to long-term retirement success.
> Why should workers choose to save for retirement through a personally established retirement account?
> Identify some risks of investing in precious stones and gems.
> Identify one collectible that might be an interesting investment, and explain why it might be difficult to make a profit.
> Give a math example of how to calculate a bond’s yield to maturity that is different than the one in the book.
> Summarize why bonds and interest rates have an inverse relationship.
> Summarize the differences between I-bonds and TIPS bonds.
> Distinguish among Treasury bills, notes, and bonds.
> What are the basic differences between corporate, U.S. government, and municipal bonds?
> Distinguish between investment- and speculative-grade bonds.
> Both options and futures are risky investments. Identify one that seems like an unwise idea, and explain why it is unappealing.
> What happens to a worker’s 401(k) retirement account if he or she signs up for an auto-rebalance account service?
> Comment on three popular rules of thumb of asset allocation including being 100 percent invested in stocks.
> What is asset allocation, and why does it work?
> Explain the concept of dollar-cost averaging including why one invests at below average costs.
> What is the goal of portfolio diversification, and how is this accomplished?
> Summarize what the buy-and-hold long-term investment strategy is all about.
> Distinguish between own-occupation and any-occupation disability income insurance plans.
> Identify three policy provisions to consider when purchasing disability income insurance.
> Explain who needs disability insurance.
> Summarize how you determine your level of need for disability income insurance.
> Describe what would encourage you to invest in real estate given that in recent years prices in some communities have declined.
> Give two examples of someone who might want to purchase a floater insurance policy.
> Who should consider buying flood and earthquake insurance?
> Explain how purchasing an umbrella liability insurance policy applies the large loss principle.
> Describe two costs associated with selling a home in addition to the real estate commission.
> List one advantage and one disadvantage of using a real estate broker to sell a home.
> List some disadvantages of trying to sell a home yourself.
> Explain how the interest is calculated on a consumer loan that uses the discount method.
> What is the effect of the rule of 78s when a borrower repays an add-on method loan early?
> Summarize how interest is calculated on a consumer loan that uses the add-on method.
> Explain how the interest is calculated on a consumer loan that uses the declining balance method.
> What percentage of your portfolio, if any, do you think should be invested in high-risk investments? Explain.
> Comment on why real estate investors often have time-consuming management demands.
> Briefly comment on why interest rate risk is dangerous to real estate investors.
> Summarize why foreclosures and illiquidity are disadvantages in real estate investing.
> How might you go about monitoring your mutual fund investments?
> Explain why it is important to review your investment philosophy and goals when selecting mutual fund investments.
> Explain what selling short is and how it can go wrong for an investor.
> What is buying on margin and how it can go wrong for an investor?
> Summarize the differences among types of stock orders: market, limit, and stop order.
> Summarize the differences among discount, online, and full-service brokers.
> What experiences have you or a family member had with the automobile insurance claims process? What if anything might have been done differently or better?
> Julia has been thinking about how she uses credit cards. She has two bank cards and three store cards. The APRs on the cards range from 10.5 to 24.9 percent, with the store cards being among the highest. She uses the cards often and picks whatever card s
> Summarize how herd behavior sometimes leads to a stock market bubble.
> Identify three trading mistakes that can be avoided by long-term investors.
> What should long-term investors do about market volatility?
> Distinguish between bull and bear markets.
> Give three signs of an unethical life insurance agent.
> List the benefits of buying term and investing the rest.
> Give some examples of fair prices for life insurance and one example of why some people must pay higher premiums than others.
> What is meant by integrating your life insurance into your financial plan over the life cycle?
> Distinguish between the benefit period and the waiting period for a long-term care policy.
> Distinguish among the three levels of care in long-term insurance.
> Many people complain that property insurance policies should pay more than what the insurance companies say is the actual cash value of the property, such as for a used motor vehicle with low mileage that is in near-perfect condition. How do you feel abo
> What are activities of daily living?
> Explain why selecting a policy with a high deductible and high liability limits is better than one with a low deductible and low liability limits.
> Distinguish between collision and comprehensive insurance.
> Identify who is protected by medical payments coverage.
> Explain the meaning of the numbers 100/200/75.
> Identify the four types of automobile insurance coverage.
> Identify the two ways that homebuyers build equity in their property.
> Distinguish between a conventional mortgage loan and an adjustable-rate loan.
> Explain why the portions of a monthly mortgage payment that are allocated toward interest and toward principal will vary as the loan is repaid.
> Summarize how a small claims court work.
> Are prepayment penalties such as that applied with the rule of 78s justified? Why or why not?
> How do lemon laws work?
> Distinguish between mediation and arbitration.
> Summarize the FTC’s cooling-off rule to cancel a contract.
> Which alternative lender probably charges the highest interest rate?
> What is an acceleration clause?
> What reasons do some people offer for not having a relative co sign a student loan?
> What is the difference between a secured and an unsecured loan?
> Distinguish between a single-payment and an installment loan.
> Offer your impressions of working for an employer that offers a sizable matching contribution compared with one that does not.
> Explain why defined-contribution retirement plans are called self-directed.
> If you were the borrower, how would you feel about the fact that interest costs are higher in the early months of a declining balance loan than they are in the later months?
> Summarize the main differences between defined-contribution and defined-benefit pension plans.
> Explain what is meant by tax-sheltered investment growth on money invested through qualified retirement accounts.
> Distinguish among after-tax money put into investments, pretax money, and vesting.
> List two ways to finance a real estate investment.
> Comment on the wisdom of buying a timeshare as an investment.
> Summarize how the discounted cash-flow method helps determine the right price to pay for a real estate investment.
> Summarize the effects of loads and fees on investment returns.
> Which is better for most investors, load or no-load funds? Why?
> Give three examples of fees or charges associated with load funds.
> Where can you go to look up stock symbols and prices?
> Some credit cards offer rewards points or a cash back reward for all purchases made on the card. Which rewards card would you prefer and why?
