RMI topic 7- exam 3

[Topic 7-25] Employee Benefits largely insure against risks to what?

A) Human Capital

B) Property

C) Liability

D) None of the above.

A) Human Capital

[Topic 7-18] Michael is evaluating the employee benefits package offered by his new employer. Which of the following would typically be excluded from taxable income under IRS regulations?

A) Cash bonuses related to performance.

B) Contributions to a Flexible Spending Account (FSA).

C) Health insurance benefits exceeding $50,000.

D) Reimbursement for travel to and from work.

E) None of the above.

B) Contributions to a Flexible Spending Account (FSA).

D) Reimbursement for travel to and from work.

[Topic 7-23] A tech company is looking to expand its talent pool by attracting employees who are interested in remote work. What benefit would the company likely promote to legally appeal to prospective remote employees?

A) Commuter benefits program.

B) Relocation assistance for moving closer to the company headquarters.

C) On-site gym and cafeteria facilities.

D) A stipend for home office setup and monthly internet costs.

E) None of the above.

D) A stipend for home office setup and monthly internet costs.

[Topic 7-21] (Exactly One Correct Answer) A startup in a metropolitan area is seeking to attract young, single professionals who prioritize flexibility and work-life balance. To legally align with this preference, which benefit is the startup most likely to emphasize in its recruitment materials?

A) Substantial life insurance policies.

B) Generous 401(k) matching contributions.

C) Extended parental leave benefits.

D) Sabbaticals after a certain period of employment.

D) Sabbaticals after a certain period of employment.

Topic 7-19] The government wants to implement a social insurance program that covers the risks associated with long-term disabilities. Which of these features should the program not have if the goal is to maximize social welfare?

A) Coverage that includes common illnesses like the flu.

B) Reinsurance

C) Mandatory participation

D) (Actuarially fair) premiums based on age and previous health conditions.

E) None of the above.

A) Coverage that includes common illnesses like the flu.

B) Reinsurance

[Topic 7-4] Which of the following are considered employee benefits?

A) Salary

B) Paid vacation time

C) Retirement plan

D) Health insurance

E) None of the above.

B) Paid vacation time

C) Retirement plan

D) Health insurance

[Topic 7-15] What is the main reason a company like Spotify would offer free concerts to its employees?

A) Because people who like music value concerts more than cash.

B) Because smart people like concerts.

C) Economies of Scale

D) Because people who DON’T like music value cash more than concerts.

E) None of the above.

A) Because people who like music value concerts more than cash.

D) Because people who DON’T like music value cash more than concerts.

Topic 7-5] Which of the following are examples of voluntary benefits that employers may offer?

A) Life insurance

B) Workers’ compensation

C) Dental insurance

D) Short-term disability insurance

E) None of the above.

A) Life insurance

C) Dental insurance

D) Short-term disability insurance

[Topic 7-13] (Exactly One Correct Answer) What percentage of total employee compensation do benefits comprise on average?

A) 20%

B) 40%

C) 10%

D) 30%

D) 30%

[Topic 7-10] Which statement about social insurance programs in the U.S. is TRUE?

A) Participation is voluntary for individuals

B) They include Social Security, Medicare, and unemployment

C) They are fully funded by employer contributions

D) Everyone who participates will eventually get a benefit.

E) None of the above.

B) They include Social Security, Medicare, and unemployment

[Topic 7-2] An employer wants to increase the compensation of employees by $5,000 per employee. The employer is considering what form this increase in compensation should take. All of the following are reasons why an employer might want to offer employee benefits as part of compensation EXCEPT:

A) To decrease the overall cost of compensation to the employer.

B) To take advantage of the special tax status granted to many types of employee benefits.

C) To attract and retain capable employees.

D) None of the above.

A) To decrease the overall cost of compensation to the employer.

[Topic 7-1] Social insurance programs

A) Mandate participation in the insurance program.

B) Have the employer act in a risk bearing capacity to provide the insurance and pay benefits.

C) Include Social Security, Medicare, workers’ compensation, and unemployment insurance.

D) Include Social Security, Medicare, and unemployment insurance.

E) None of the above

A) Mandate participation in the insurance program.

D) Include Social Security, Medicare, and unemployment insurance.

[Topic 7-6] What are the primary types of retirement plans offered by employers?

A) Pensions

B) 401(k)s

C) Social Security

D) Stock Options

E) None of the above.

A) Pensions

B) 401(k)s

[Topic 7-12] Which of the following is NOT an advantage of the government providing social insurance?

A) The government can run a deficit to fund program costs

B) Everyone is covered, eliminating adverse selection

C) Participation is voluntary, increasing consumer choice

D) Spreading risk over a large population lowers premiums

E) None of the above.

C) Participation is voluntary, increasing consumer choice

[Topic 7-26] What is human capital

A) A system of accounting that includes human beings as physical assets on a balance sheet, similar to inventory or equipment

B) The intangible skills and knowledge that you have acquired.

C) The monetary value assigned to a population by a governing body for fiscal assessments

D) Anything that earns you income.

E) None of the above.

B) The intangible skills and knowledge that you have acquired.

[Topic 7-8] (Exactly One Correct Answer) Patagonia wants to attract employees who are passionate about environmental sustainability. Which of the following benefits would best help ABC Company appeal to this type of employee?

A) Free gym membership at a luxury fitness club

B) Paid volunteer time off for environmental projects

C) Weekly social events with an open bar

D) On-site gourmet cafeteria with Michelin-starred chefs

B) Paid volunteer time off for environmental projects

[Topic 7-17] (Exactly One Correct Answer) A company is looking to improve its benefits package to reduce turnover. Which of the following benefits is likely to be classified as ‘de minimis’ and least impactful?

A) Onsite childcare services.

B) Comprehensive health insurance plan.

C) Occasional free meals provided during overtime.

D) Free monthly public transit passes.

C) Occasional free meals provided during overtime

[Topic 7-3] (Exactly One Correct Answer) What is the main reason a company like Spotify would offer free concert tickets to it’s employees?

A) Because smart people like concerts.

B) Because people who like music value concerts more than people who don’t like music.

C) To take advantage of group rates.

D) To avoid taxes.

B) Because people who like music value concerts more than people who don’t like music.

[Topic 7-7] Which of the following are reasons employers offer benefits as part of employee compensation?

A) To decrease the overall cost of compensation

B) To comply with government regulations

C) To take advantage of tax benefits for certain types of benefits

D) To attract and retain capable employees

E) None of the above.

B) To comply with government regulations

C) To take advantage of tax benefits for certain types of benefits

D) To attract and retain capable employees

[Topic 7-14] (Exactly One Correct Answer) Jenna is an HR manager designing benefit packages. For which of the following goals would offering a subsidized on-site childcare center be LEAST effective?

A) Attracting and retaining employees with young children

B) Projecting a family-friendly company culture and image

C) Boosting productivity by reducing employee absenteeism

D) Reducing the cost of benefits per employee

D) Reducing the cost of benefits per employee

[Topic 7-16] Jane is evaluating her employee benefits at a new job. Which of the following should she consider as potential ‘deferred compensation’ ?

A) Annual salary of $80,000.

B) Year-end performance bonuses.

C) Health insurance premiums paid by the employer.

D) Employer-matched 401(k) contributions.

E) None of the above

D) Employer-matched 401(k) contributions.

[Topic 7-24] An innovative marketing agency aims to bring in fresh talent by hiring recent college graduates. Which benefit package would the agency likely design to legally attract recent graduates?

A) Discounts on products aimed at older demographics.

B) Comprehensive retirement plan with early retirement options.

C) Health plans that offer extensive coverage for chronic conditions.

D) Student loan repayment assistance programs.

E) None of the above

D) Student loan repayment assistance programs.

Topic 7-22] (Exactly One Correct Answer) A design firm wants to attract freelance or contract workers interested in projectbased work without long-term commitment. Which benefit would the firm be most likely to offer to legally attract this type of worker?

A) Per-project bonuses and profit-sharing options.

B) Multi-year employment contracts with annual raises.

C) In-house child care services.

D) Long-term disability insurance.

A) Per-project bonuses and profit-sharing options.

[Topic 7-20] A company, aiming to attract employees who are likely not to have children while working there, decides to structure its benefits package to (legally, though not morally) align with this preference. The company wants to ensure the package is attractive to potential hires who don’t plan to have children, while less appealing to those who do, all within the bounds of employment laws. Which of the following is the company most likely to offer to legally discourage applicants who plan to have children, while attracting those without?

A) Paid maternity/paternity leave.

B) High deductible health plans

C) Both kinds of FSAs

D) Flexible time off

E) None of the above

B) High deductible health plans

[Topic 7-9] Due to budget constraints, Cam Corp needs to reduce employee compensation costs. However, they still want to provide value to employees. Which of the following actions would best accomplish this?

A) Eliminate all ancillary benefits

B) Require employee contributions for health insurance

C) Decrease salaries but increase benefits

D) None of the above.

A) Eliminate all ancillary benefits

B) Require employee contributions for health insurance

[Topic 7-11] Javier is choosing between two job offers. Goldman Sachs offers a higher salary but minimal benefits. State Street offers a lower salary but generous traditional benefits. Under which circumstance would Javier likely prefer the offer from State Street?

A) Javier expects to stay with the company for only 1-2 years

B) Javier is a young, healthy employee

C) Javier has a chronic health condition and dependents

D) Javier has a working spouse with family benefits

E) None of the above.

C) Javier has a chronic health condition and dependents