Financial Knowledge Quiz

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CLASS: HEPBURN FINANCIAL GROUP CLIENTS & FRIENDS
TIME LIMIT: NONE
# OF ATTEMPTS: NO LIMIT
BRING YOUR EMAIL AND A SHARPENED MIND (NO PENCILS ALLOWED)

Questions and Answers

1.

HOW MANY COMPANIES ARE REPRESENTED IN THE DOW JONES INDUSTRIAL AVERAGE?
- A.
  
  10
- B.
  
  30
- C.
  
  300
- D.
  
  500
- E.
  
  It changes every day
Correct Answer
B. 30

Explanation
Been this number for a long time, although the names change periodically. These are the giants of American business, but not strictly heavy industry anymore.

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2.

FOR CAPITAL GAINS TO BE CONSIDERED LONG-TERM, FOR TAX PURPOSES, AN INVESTMENT MUST BE HELD LEAST HOW LONG, BEFORE SELLING?
- A.
  
  4 days
- B.
  
  4 weeks
- C.
  
  1 year
- D.
  
  1 presidential term (4 years)
Correct Answer
C. 1 year

Explanation
This marks the division between a long term and short term for reporting purposes, although it seems like presidential or congressional tinkering is never far away.

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3.

LONG-TERM CARE INSURANCE (LTC):
- A.
  
  Is only for the very elderly
- B.
  
  Can help protect assets from costly nursing care
- C.
  
  Is not necessary because Medicare always covers long term care
- D.
  
  Is always available regardless of past health history
Correct Answer
B. Can help protect assets from costly nursing care

Explanation
Surprisingly, almost half of LTC benefits are paid for persons under 65 during recovery after accident or illness.

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4.

CREDIT CARDS:
- A.
  
  Often have 3 month grace periods on new purchases.
- B.
  
  Typically have lower interest rates than home equity loans.
- C.
  
  Have interest payments that are not tax deductible.
- D.
  
  Are a cost effective way of financing investment purchases.
Correct Answer
C. Have interest payments that are not tax deductible.

Explanation
If you don't even like to see the words "Credit Cards" anymore, you may need some guidance in managing your financial world. Hepburn Financial Group can help.

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5.

WHICH OF THE FOLLOWING TECHNIQUES AVOIDS PROBATE?
- A.
  
  A Will
- B.
  
  A Living Trust
- C.
  
  Having your brother-in-law, Hairy-Toe, handle your estate
- D.
  
  All of the above
- E.
  
  None of the above
Correct Answer
B. A Living Trust

Explanation
Avioding probate doesn't just happen. Without planning, probate does.

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6.

IN FINANCIAL PLANNING, THE "RULE OF 72" REFERS TO:
- A.
  
  The age at which the next generation will retire with full Social Security benefits
- B.
  
  The actual doubling of an investment over a period of time at a certain rate of return
- C.
  
  How many months or years the surrender charge is effect on some financial products
- D.
  
  The final critical time period of 72 months before retirement must begin.
Correct Answer
B. The actual doubling of an investment over a period of time at a certain rate of return

Explanation
It's cool. Get your financial calculator out. Take a single investment purchase at 7.2% for 10 years. It doubles. Now, try 10% for 7.2 years. It doubles. For some of us, this is very cool. Oh... please don't wait for the final 72 months before retiring to start thinking about your retirement accounts.

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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

Current Version
Jan 02, 2013

Quiz Edited by
ProProfs Editorial Team
Jul 01, 2009

Quiz Created by
Jwheelock

Financial Knowledge Quiz

HOW MANY COMPANIES ARE REPRESENTED IN THE DOW JONES INDUSTRIAL AVERAGE?

FOR CAPITAL GAINS TO BE CONSIDERED LONG-TERM, FOR TAX PURPOSES, AN INVESTMENT MUST BE HELD LEAST HOW LONG, BEFORE SELLING?

LONG-TERM CARE INSURANCE (LTC):

CREDIT CARDS:

WHICH OF THE FOLLOWING TECHNIQUES AVOIDS PROBATE?

IN FINANCIAL PLANNING, THE "RULE OF 72" REFERS TO: