FINAL EXAM MUTUAL FUND, INVESTMENT, INSURANCE

1. Which of the following types of insurance protects you if you are sued for accidentally damaging someone's property or hurting another person? a. Term life insurance

b. Accidental death insurance

c. Universal life insurance

d. Personal liability insurance or an umbrella policy

2. To calculate accurately the size of your future retirement nest egg, you should a. assume that your money will grow at the rate that stocks have averaged over that past 40 years b. assume that you will not do better than the average investor, and make up for that by investing more money c. base your calculations on a rate of return of 6% or more d. base your calculations on a conservative rate of return of 6% or less a year

3. Which of the following best describes dollar-cost averaging? a. The process of investing an average of a dollar a day in a stock mutual fund b. Investing an increasing dollar amount each month of the year c. Timing the market so that you buy more when share prices drop d. Investing a set dollar amount at