Deck 12: Planning for Retirement and Financial Independence

Question 1

Which of the following models typically involves placing the worst two years (from a portfolio return perspective)at the beginning of the historic model.

A)Historic Return.
B)Probability Analysis.
C)Straight-line Return.
D)Stress-tested Historic Return.

Answer 1

D

Question 2

The Pension Benefit Guaranty Corporation (PBFC)is funded by which of the following methods?
I)Assets of pension plans that the SIPC takes over as trustee.
II)Insurance premiums paid by defined benefit plans.
III)Investments of the FDIC.
IV)Recoveries from companies formerly responsible for the defined benefit plans.

A)I,II.
B)II,III.
C)II,IV.
D)III,IV.

Answer 2

C

Question 3

Which of the following is a type of home loan which requires no monthly payments from the borrower?

A)Credit line mortgage.
B)Lump sum mortgage.
C)Reverse mortgage.
D)Term certain mortgage.

Answer 3

C

Question 4

Which of the following methods assumes that the accumulated savings will be depleted at the end of an individual's lifetime?

A)Capital preservation.
B)Pure annuity.
C)Monte Carlo simulation.
D)Stress tested.

Question 5

Which of the following annuities does not provide a survivor benefit?

A)Installment Refund Annuity.
B)Joint and Survivor Annuity.
C)Life Only Annuity.
D)Period Certain Annuity.

Question 6

Which Section of the Internal Revenue Code codifies the tax treatment of the Net Unrealized Appreciation of an in-kind distribution of employer stock from a qualified retirement plan?

A)Section 72.
B)Section 83.
C)Section 401.
D)Section 402.

Question 7

The accumulation phase is a period of time in which an annuity is being:

A)Calculated.
B)Funded.
C)Paid out.
D)Underwritten.