Online Study

Interactive Practice Quizzes

New to Online Study— Your instructor will post periodic quizzes on your class web site. You take the quiz, submit your answers and instantly find out the correct answers with an appropriate explanation.

Sample Quiz

1. Which of the following statements are true regarding the impact of the characteristics of a covered group on dental plan utilization and cost?
   1. Participants over age 30 usually incur increasingly higher average annual charges
   2. Females tend to have higher utilization rates than males.
   3. Dental expenses tend to be higher for lower income participants.
   • A. I only
   • B. II only
   • C. I and II only
   • D. I and III only
   • E. I, II, and III
   C
   The correct answer is C. Utilization and expenditures increase with age, and average charges rise after age 30, reflecting the increasing need for more expensive restorative services. Females do have higher utilization rates than males, possibly because of greater awareness of the need for dental care. III is not correct, as there is a discernable increase in costs at higher income levels.
2. The systematic process of collecting information about the nature of specific jobs is referred to as:
   • A. Job description
   • B. Job evaluation
   • C. Job structure
   • D. Job analysis
   • E. Position analysis questionnaire
   D
   The correct answer is D. Job analysis is the process by which data is collected about a job. A, B, & C all represent steps in the process of developing the internal job structure but don’t specifically deal with job analysis. E is one type of method used to collect job data. See textbook, page 91.
3. Dilution is a measure of:
   • A. Net operating income
   • B. Shareholder earnings per share
   • C. Depreciation of office equipment
   • D. Economic profit
   B
   The correct answer is B. Dilution measures the earnings per share before and after additional stock is distributed. With stock options, the more stock offered to employees results in a lower value to other shareholders.
4. A retirement plan that makes contributions to the participants' accounts based on an income replacement goal (generally a percent of salary times years of service) is a:
   • A. Cash Balance Plan
   • B. Minimum Balance Pension Plan
   • C. Target Benefit Plan
   • D. Pension Equity Plan
   • E. Floor-Offset Plan
   C
   The correct answer is C. The other four answers are all either defined benefit hybrid plans, or in the case of Floor-Offset, a combination of two plans. Only the target benefit plan "makes contributions to the participants' accounts" as it is a defined contribution hybrid. This question is from Lesson 13 on Hybrid Plans. The page reference is 349-354.
5. Which of the following is a correct statement concerning Group Universal Life Insurance (GULP)?
   • A. Premiums minus mortality charges and expenses create policy cash values that are credited with earnings that accumulate on a tax-deferred basis until they are paid out.
   • B. GULP is funded by pre-tax employee contributions.
   • C. GULP is a permanent, whole life contract with a fixed premium.
   • D. GULP rates are set on a retrospective basis; therefore, the contracts are generally participating (i.e. dividends are generated for favorable experience.)
   • E. There is no minimum guaranteed rate of interest.
   A
   The correct andswer is A. In general this is the fundamental concept of GULP. Note that the tax may be even more than deferred---since the cost basis of all funds deposited into the contract is usually considered a return of cost basis.