Question 1

From an economic standpoint, financial literacy is important as:

Accepted Answer

A)   Its absence can lead to a misallocation of resources that affects society's productivity.
B)   Its absence can lead to financial ruin for the household.
C)   Its absence can lead to lower accumulation of wealth for the household.
D)   All of the above.
E)   None of the above.

Question 2

For which of the following educational saving alternatives is there an age limitation for use?

Accepted Answer

A)   Series EE.
B)   Coverdell education savings.
C)   529 plans.
D)   All of the above.
E)   None of the above.

Question 3

For which of the following educational savings alternatives is there no limitation?

Accepted Answer

A)   Series EE.
B)   IRA.
C)   529 plans.
D)   There are limitations associated with all of the above.
E)   There are limitations associated with none of the above.

Question 4

What are the disadvantages for educational savings associated with Series EE?

Accepted Answer

A)   Little investment flexibility.
B)   Income limitation.
C)   Small amount of deposit allowed.
D)   Both a and b.
E)   Both b and c.

Question 5

For which of the following relatives of the beneficiary can funds left over in a qualified tuition plan not be rolled over?

Accepted Answer

A)   Uncle.
B)   First cousin.
C)   Brother.
D)   Father.
E)   Both a and b.

Question 6

What is the third step of the educational policy statement process?

Accepted Answer

A)   Estimate the total cost for parents.
B)   Calculate the cost of education.
C)   Establish investment policy.
D)   Project the potential for financial aid.
E)   None of the above.

Question 7

Federal Supplementary Education Opportunity Grants are for undergraduates with:

Accepted Answer

A)   Particularly low family income.
B)   Particularly low SAT scores.
C)   Particularly high SAT scores.
D)   All of the above.
E)   None of the above.

Question 8

The interest rate on which of the following is a maximum of 8.3 percent regardless of market rates?

Accepted Answer

A)   Federal PLUS loans.
B)   Federal Perkins loans.
C)   Stafford loans.
D)   All of the above.
E)   None of the above. C

Question 9

For each of the following areas, please list important topics that should be discussed to help client's become financial literate:

Accepted Answer

The answer of For each of the following areas, please...

Question 10

Which of the following is not a qualified withdrawal associated with qualified tuition plans?

Accepted Answer

A)   Tuition.
B)   Supplies required by the college.
C)   Reasonable costs for room and board for students attending college at least half time.
D)   Reasonable costs for room and board for students attending college at least one quarter time.
E)   All of the above are qualified withdrawals.

Question 11

For which of the following loans are the student's parents liable to repay?

Accepted Answer

A)   Federal PLUS loans.
B)   State PLUS loans.
C)   Stafford loans.
D)   All of the above.
E)   None of the above.

Question 12

Which of the following educational saving alternatives allows pre-tax deposits?

Accepted Answer

A)   Series EE.
B)   Coverdell education savings.
C)   529 plans.
D)   All of the above.
E)   None of the above.

Question 13

Which of the following is not a variable that influences the selection of the type of schooling?

Accepted Answer

A)   Household resources.
B)   Parental values.
C)   Child's wishes.
D)   Child's talents.
E)   All of the above are variables that influence the selection of the type of schooling. E

Question 14

For a Roth IRA, what was the income eligibility for a single filing in 2005?

Accepted Answer

A)   ($91,850-$121,850.
B)   $95,000-$110,000.
C)   $95,000-$121,850.
D)   $61,000-$110,000.
E)   None of the above.

Question 15

UGMAs are:

Accepted Answer

A)   Unrestricted.
B)   Restricted to financial assets as investment vehicles.
C)   Restricted to limited partnerships as investment vehicles.
D)   Restricted to real estate as investment vehicles.
E)   Both c and d. B

Question 16

As the starting date of the education approaches, allocation of education savings to bond and money markets should:

Accepted Answer

A)   Not change
B)   Decrease
C)   Increase.
D)   Represent 13.3% of the portfolio.
E)   None of the above.

Question 17

What is the maximum reduction of financial aid associated with money in the student's parents' account?

Accepted Answer

A)   5.6%.
B)   12.4%
C)   29.4%.
D)   35%.
E)   None of the above.

Question 18

Please list and explain seven basic financial literacy principles.

Accepted Answer

(1) Simplicity: Financial issues are dau...

Question 19

Private school payments for the period before college are:

Accepted Answer

A)   Eligible for Coverdells if student is a minor when attending private school.
B)   Eligible for Coverdells.
C)   Ineligible for Coverdells.
D)   Ineligible for Coverdells if student is a minor when attending private school.
E)   None of the above.

Question 20

Which of the following is not a topic that should be discussed to assist clients in financial literacy in the area of investments?

Accepted Answer

A)   Appreciating diversification and the benefits of long term investing.
B)   Understanding the advantage of index funds for low maintenance supervision.
C)   How to deal with impulsive investment behavior.
D)   Explaining the most attractive way to purchase investment selections.
E)   All of the above should be discussed to assist clients in financial literacy in the area of debt.

Exam 13: Educational Planning

From an economic standpoint, financial literacy is important as:

Correct AnswerverifiedShow Answer

For which of the following educational saving alternatives is there an age limitation for use?

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For which of the following educational savings alternatives is there no limitation?

Correct AnswerverifiedShow Answer

What are the disadvantages for educational savings associated with Series EE?

Correct AnswerverifiedShow Answer

For which of the following relatives of the beneficiary can funds left over in a qualified tuition plan not be rolled over?

Correct AnswerverifiedShow Answer

What is the third step of the educational policy statement process?

Correct AnswerverifiedShow Answer

Federal Supplementary Education Opportunity Grants are for undergraduates with:

Correct AnswerverifiedShow Answer

The interest rate on which of the following is a maximum of 8.3 percent regardless of market rates?

Correct AnswerverifiedC

For each of the following areas, please list important topics that should be discussed to help client's become financial literate:

Correct AnswerverifiedShow Answer

Which of the following is not a qualified withdrawal associated with qualified tuition plans?

Correct AnswerverifiedShow Answer

For which of the following loans are the student's parents liable to repay?

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Which of the following educational saving alternatives allows pre-tax deposits?

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Which of the following is not a variable that influences the selection of the type of schooling?

Correct AnswerverifiedE

For a Roth IRA, what was the income eligibility for a single filing in 2005?

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UGMAs are:

Correct AnswerverifiedB

As the starting date of the education approaches, allocation of education savings to bond and money markets should:

Correct AnswerverifiedShow Answer

What is the maximum reduction of financial aid associated with money in the student's parents' account?

Correct AnswerverifiedShow Answer

Please list and explain seven basic financial literacy principles.

Correct Answerverified(1) Simplicity: Financial issues are dau...View AnswerShow Answer

Private school payments for the period before college are:

Correct AnswerverifiedShow Answer

Which of the following is not a topic that should be discussed to assist clients in financial literacy in the area of investments?

Correct AnswerverifiedShow Answer

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C

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E

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B

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(1) Simplicity: Financial issues are dau...
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