Understanding Business and Personal Law
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Unit 7: Planning for the Future
      
  1.Marriage is a civil contract that comes into existence  
  a.   when you become engaged.  
  b.   the day of your wedding.  
  c.   the day after your wedding.  
  d.   one year from the date of your wedding.  
      
  2.The primary duty that arises from the marriage contract is the duty  
  a.   to file a joint income tax return.  
  b.   of being faithful to your spouse.  
  c.   to provide support to each other.  
  d.   to refrain from causing bodily harm to each other.  
      
  3.Except in Mississippi and Nebraska, you can be married without parental consent at age  
  a.   16  
  b.   17  
  c.   18  
  d.   21  
      
  4.A proxy marriage is allowed in some states and  
  a.   does not require a blood test or waiting period.  
  b.   is considered a common-law marriage.  
  c.   requires that the parties live together for a certain period of time.  
  d.   requires a ceremony.  
      
  5.An annulment is a declaration by the court that  
  a.   no one party is to blame.  
  b.   reconciliation has been attempted.  
  c.   the marriage was never effective.  
  d.   divorce proceedings have begun.  
      
  6.No-fault divorce  
  a.   eliminates the need to prove that one party is to blame.  
  b.   is a declaration by the court that the marriage was never effective.  
  c.   requires that you live apart from your spouse for one year before divorce is allowed.  
  d.   allows for the dissolution of marriage to take place within 30 days.  
      
  7.A domicile is  
  a.   a residence which can be abandoned or surrendered at any time.  
  b.   your principal place of abode.  
  c.   different from a residence because you can have several domiciles at a time.  
  d.   a place that you have no intention of returning to live.  
      
  8.When awarding custody of children, the court  
  a.   usually awards legal custody to the mother.  
  b.   prefers to send children to foster care.  
  c.   often awards custody to the maternal grandparents.  
  d.   attempts to determine what is in the best interest of the children.  
      
  9.A tenancy for years is  
  a.   the right to occupy property for a definite or fixed period of time.  
  b.   a tenancy that continues for successive fixed periods.  
  c.   an interest in real property that continues for an indefinite period of time.  
  d.   arises when a tenant does not leave the premises after his or her tenancy has expired.  
      
  10.The terms of a lease are also known as  
  a.   articles.  
  b.   items.  
  c.   statements.  
  d.   covenants.  
      
  11.Generally, the landlord would be required to  
  a.   install a screen door.  
  b.   provide blinds for the windows.  
  c.   fix a leaky roof.  
  d.   maintain the premises.  
      
  12.Committing waste is defined as  
  a.   creating noise pollution that disturbs the neighbors.  
  b.   a violation of the sanitation code.  
  c.   substantial damage to the premises.  
  d.   creating too much garbage each week.  
      
  13.As you pay off the mortgage and your property increases in value, you will see a gradual increase in your  
  a.   debt ratio.  
  b.   equity.  
  c.   mortgage payment.  
  d.   eminent domain.  
      
  14.The most popular type of home is a  
  a.   multifamily home.  
  b.   single-family home.  
  c.   mobile home.  
  d.   condominium.  
      
  15.A fixed-rate mortgage  
  a.   has an interest rate tied to a financial index.  
  b.   is usually short-term and the payments may only cover the interest.  
  c.   has lower monthly payments that rise gradually.  
  d.   is usually long-term and has equal monthly payments.  
      
  16.When the government takes private property, with compensation, for public use it is called  
  a.   eminent domain.  
  b.   zoning domain.  
  c.   adverse possession.  
  d.   easement possession.  
      
  17.The written contract between the person buying the insurance and the insurance company is called the  
  a.   rider.  
  b.   premium.  
  c.   policy.  
  d.   beneficiary.  
      
  18.Universal life insurance is  
  a.   a form of limited-payment insurance which allows you to stop paying premiums after a stated period of time.  
  b.   a form of straight life insurance which allows you to change the terms of the policy as your needs change.  
  c.   a form of insurance which provides protection for a stated time, usually 20 or 30 years.  
  d.   also called ordinary life insurance and requires the premiums to remain constant throughout the policy.  
      
  19.The insurer may cancel the policy if the insured  
  a.   develops a catastrophic illness.  
  b.   moves to another state.  
  c.   marries or divorces.  
  d.   makes false statements.  
      
  20.The oldest kind of insurance coverage in the world is  
  a.   marine insurance.  
  b.   health insurance.  
  c.   life insurance.  
  d.   fire insurance.  
      
  21.A federally administered program that provides income to people when their regular income stops because of retirement or disability is called  
  a.   a 401(K) plan.  
  b.   a Keogh Plan.  
  c.   a pension plan.  
  d.   Social Security.  
      
  22.The vesting of retirement benefits  
  a.   is also called portability.  
  b.   guarantees a worker the right to receive a future pension.  
  c.   takes place after the person reaches his or her 65th birthday.  
  d.   is available only to government employees.  
      
  23.An IRA is  
  a.   a research study based on the years people live after they retire.  
  b.   a codicil to a will.  
  c.   an individual's own personal pension plan.  
  d.   a document used by the family of someone who dies without a will.  
      
  24.A will may be made by any person who is  
  a.   of sound mind and over 16 years of age.  
  b.   owns personal property valued at over $10,000.  
  c.   self-employed and plans to pass the business to his or her heirs.  
  d.   of sound mind and has reached the age of adulthood.  
      
  25.When a person dies intestate it means  
  a.   the person died without a will.  
  b.   the laws of the state in which the person resided are void.  
  c.   the person died with a will.  
  d.   no adult children were intentionally left out of the will.  
      
  26.The prenuptial agreement is made between prospective spouses contemplating marriage.  
  a.   TRUE  
  b.   FALSE  
      
  27.States allow marriages between persons related by consanguinity.  
  a.   TRUE  
  b.   FALSE  
      
  28.A divorce is not required to end a common-law marriage.  
  a.   TRUE  
  b.   FALSE  
      
  29.Some states require a waiting period before a license is issued in case the man or woman want to reconsider their decision.  
  a.   TRUE  
  b.   FALSE  
      
  30.Marriages generally can be annulled on the grounds of duress and cruelty.  
  a.   TRUE  
  b.   FALSE  
      
  31.Adultery is the most common ground for divorce.  
  a.   TRUE  
  b.   FALSE  
      
  32.In a divorce case, the court's jurisdiction is based on where the person seeking the divorce makes his or her home.  
  a.   TRUE  
  b.   FALSE  
      
  33.The Uniform Interstate Family Support Act made no-fault divorces legal.  
  a.   TRUE  
  b.   FALSE  
      
  34.A holdover tenant is someone who plans to rent the property for another lease period.  
  a.   TRUE  
  b.   FALSE  
      
  35.If a tenant installs a ceiling fan, he or she must turn it over to the landlord at the expiration of the tenancy.  
  a.   TRUE  
  b.   FALSE  
      
  36.Trade fixtures remain the personal property of the tenant and can be removed at the end of the term of the lease.  
  a.   TRUE  
  b.   FALSE  
      
  37.If your landlord deprives you of heat or electricity, a tenancy of sufferance occurs.  
  a.   TRUE  
  b.   FALSE  
      
  38.Except during times of recession, you can often sell your house for more than you paid for it.  
  a.   TRUE  
  b.   FALSE  
      
  39.Your debt ratio is the amount of your mortgage payment divided by the total mortgage.  
  a.   TRUE  
  b.   FALSE  
      
  40.An ARM has an interest rate that moves up and down during the term of the mortgage.  
  a.   TRUE  
  b.   FALSE  
      
  41.Tenancy by the entirety may be held by any two people who have purchased a home together.  
  a.   TRUE  
  b.   FALSE  
      
  42.The premium is the amount of money you pay to the insurance company for insurance coverage.  
  a.   TRUE  
  b.   FALSE  
      
  43.If you wanted special insurance for a large diamond ring, you would probably purchase an attachment to your insurance policy called a rider.  
  a.   TRUE  
  b.   FALSE  
      
  44.Universal life insurance is a form of term insurance.  
  a.   TRUE  
  b.   FALSE  
      
  45.Under COBRA, employees may elect to reduce their health insurance premiums by 50 percent.  
  a.   TRUE  
  b.   FALSE  
      
  46.Under a 401(K) plan, employees are given a bonus each year as part of their salary.  
  a.   TRUE  
  b.   FALSE  
      
  47.If your are willing to prepare for retirement early in your career, you can make a significant difference in your level of future income.  
  a.   TRUE  
  b.   FALSE  
      
  48.If you have an Education IRA, the interest you earn is tax free.  
  a.   TRUE  
  b.   FALSE  
      
  49.A document to change an existing will is called a rider.  
  a.   TRUE  
  b.   FALSE  
      
  50.If you die without a will, your surviving spouse usually receives nothing from your estate.  
  a.   TRUE  
  b.   FALSE  

 
 
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