Exam 3 - FINC2400 Test 3 Fall 2007 Name(print VERSION 1...

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Page 1 of 4 FINC2400 Test 3 Name (print): __________________________________________________ Fall 2007 VERSION 1 Section 1 True/False Indicate the correct answer for each question by circling your response. (10 points) 1. All insurance companies must follow strict guidelines about what they invest in, so it doesn’t matter which company you buy your policy from, they’re all equally safe. True False 2. If you leave a company and are unemployed, the COBRA Act allows you to pay for continued health insurance throu gh that company’s plan for 18 – 36 months after you leave. True False 3. Young investors who have many years to go until retirement should invest in stocks and take on higher risk because of the time dimension of investing. True False 4. Flood protection is not a standard part of a home insurance contract; rather, it is supplemental coverage that comes at an additional cost. True False 5. A life insurance policy cost-of-living adjustment (COLA) rider increases death benefits at the same rate as inflation. True False 6. The Efficient Markets Hypothesis says that Wall Street analysts can consistently choose stocks that outperform the Dow Jones Industrial Average. True False 7. Group health insurance is typically cheaper than individual health insurance. True False 8. The state of Alabama requires drivers to be insured. True False 9. An unmarried adult with no children or other dependents should always have a life insurance policy. True False 10. Insurance customers who have a higher credit score will generally pay lower insurance premiums. True False Section 2 Short Answers. Print legibly . I mean, “print legibly”. And show your calculations for full credit. 1.
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This note was uploaded on 04/20/2008 for the course FINC 2400 taught by Professor Caudill during the Fall '07 term at Auburn University.

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Exam 3 - FINC2400 Test 3 Fall 2007 Name(print VERSION 1...

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