1. What is Capital Asset Pricing Model? How would an average investor use the model to decide which stocks to buy or sell?
2. Joe’s salary is $200,000 and he receives a group term life insurance policy equal to two times his salary. Presuming the plan is non-discriminatory, how much of the face-value of the insurance policy, if any, is subject to inclusion in his W-2 income?
a. $0.
b. $50,000.
c. $150,000.
d. $350,000.
3. Erin is single and a mom of a 4 year old child. Erin has net taxable income and salary of $45,000 making her a 25% marginal income tax payer. She spends $3,000 on child care expenses. Should Erin take the child care credit or put $2,000 in the FSA?
a. Child care credit by $100.
b. FSA by $53.
c. FSA by $300.
d. They are the same.