BM418 Review Sheet – Quiz #4

Financial Planning

Sudweeks

Spring 2012

*This list is not all-inclusive, but is a great starting point in your preparation for your first Quiz. Remember my goal is to share principles and tools so you can apply these things in your daily lives. This is the only document that can be open when you are taking your Quiz—it is a closed book closed notes Quiz.

Format:

The exam will consist of multiple choiceand work out problems. We anticipate it will take 3/4 to anhour to complete, but you will be given 2 hours (international students are allowed another ½ hour). The Exam will cover discussion from Day 1 to 3 and from Chapters 1 through 3 of the book. It is due before the next class.

Recommended actions for every Day:

  • Review your notes. The best starting point is the notes that you took in class. Review them first before anything else.
  • Review the chapters. This is the foundation material for the discussions. Skim what you have already read, read through the Summary of each chapter
  • Review the Class Summaries. These are good discussions of what the objectives are for the class and how the activities we performed supported those activities
  • Review the PowerPoints and Other Materials.

Additional Information to know specific to this Exam:

Day 12: Insurance 1: Basics; Insurance 2: Life Insurance (Chapters 11 and 12)

  • Know the different ways to manage risk and when it is appropriate to use each
  • Be able to calculate how much life insurance is necessary using the earnings multiple approach and the needs approach

Day 13: Insurance 3: Health Insurance; Insurance 4: Auto, Home & Liability Insurance(Chapters13 and 14)

  • Know the factors that can help you control your health-care costs
  • Be familiar with automobile insurance coverage terminology and how to calculate costs when you get in an accident after insurance coverage

Day 14: Investments 1: Before you Invest; Investments 4: Bond Basics (Chapters17 and 20)

  • Be able to explain the principles for successful investing (there are 10 of them)
  • Know the investment hourglass
  • Be able to calculate profit/loss from the different types of bond transactions
  • Be able to calculate current yield, YTM

Day 15: Investments 2: Your Investment Plan; Investments 3: Securities Market Basics (Chapters 18 and 19)

  • Be able to classify an investor (i.e. very conservative, conservative, etc.)
  • Understand benchmarks and how they are differentiated
  • Be able to determine profit/loss from the different types of stock transactions

Quiz Review Formulas

There will not be any provided formulas for this quiz. It is up to you to remember the formulas and processes for this quiz. Use this review sheet to help you know what will be important to know on this quiz. Good Luck!

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