Question 1

Common practices used by dishonest lenders include all of the following, except the lender

Accepted Answer

A)  prohibiting the borrower from purchasing insurance or other financial services as a condition of the loan. 
B)  charging high loan fees which cause financing costs to be much higher than the quoted rates. 
C)  requiring that the borrower purchase insurance or other financial services. 
D)  requiring a large balloon payment that will necessitate additional financing to pay it off. 
A)  prohibiting the borrower from purchasing insurance or other financial services as a condition of the loan. 
B)  charging high loan fees which cause financing costs to be much higher than the quoted rates. 
C)  requiring that the borrower purchase insurance or other financial services. 
D)  requiring a large balloon payment that will necessitate additional financing to pay it off. A

Question 2

Home equity is defined as the market value of the home less the debt owed on the home.

Accepted Answer

A) True 
 B)False  True

Question 3

Purchasing a car is a big decision. Therefore, you should not

Accepted Answer

A)  use the Internet to price shop. 
B)  read Consumer Reports to find a good car value. 
C)  ask a friend or relative to go with you to the car lot. 
D)  rely on the dealer personnel as the best source of expert advice. 
A)  use the Internet to price shop. 
B)  read Consumer Reports to find a good car value. 
C)  ask a friend or relative to go with you to the car lot. 
D)  rely on the dealer personnel as the best source of expert advice. D

Question 4

You could reduce the size of your monthly loan payments by

Accepted Answer

A)  agreeing to a higher interest rate. 
B)  borrowing the same amount of money but for a shorter period of time. 
C)  borrowing more money initially for the same period of time. 
D)  lengthening the maturity of the loan. 
A)  agreeing to a higher interest rate. 
B)  borrowing the same amount of money but for a shorter period of time. 
C)  borrowing more money initially for the same period of time. 
D)  lengthening the maturity of the loan.

Question 5

Regarding the amount of money borrowed on a loan, all of the following are true, except

Accepted Answer

A)  the amount is based on how much the lender believes you can pay back in the future. 
B)  you should borrow slightly more than you need to cover future inflation. 
C)  you should only borrow the amount you need. 
D)  you will have to pay interest on the entire amount. 
A)  the amount is based on how much the lender believes you can pay back in the future. 
B)  you should borrow slightly more than you need to cover future inflation. 
C)  you should only borrow the amount you need. 
D)  you will have to pay interest on the entire amount.

Question 6

Buying a new car online is just about as efficient as buying an airline ticket or a book.

Accepted Answer

A) True 
 B)False

Question 7

Determining the amount of money you can afford to borrow on a personal loan is a decision that should be included in your personal financial plan.

Accepted Answer

A) True 
 B)False

Question 8

It is usually better to lease a vehicle than buy one, since you are not responsible for the repairs or maintenance on a leased car.

Accepted Answer

A) True 
 B)False

Question 9

In securing personal loans from family members or friends, the loan agreement should be verbal or just consist of a "gentlemen's understanding."

Accepted Answer

A) True 
 B)False

Question 10

The APR measures the finance expenses (including interest and all other expenses) on a loan on a(n)

Accepted Answer

A)  quarterly basis. 
B)  annualized basis. 
C)  monthly basis. 
D)  daily basis. 
A)  quarterly basis. 
B)  annualized basis. 
C)  monthly basis. 
D)  daily basis.

Question 11

Use the following two columns of items to answer the matching questions below:
-loan contract
A)disclosure of information including a balance sheet and cash flow statement
B)a contract that specifies the terms of the loan agreed to by the borrower and lender
C)loan that is not backed by collateral
D)life or duration of a loan

Accepted Answer

The answer of Use the following two columns of items...

Question 12

________ is a method of computing interest based on the existing principal amount of the loan.

Accepted Answer

The answer of ________ is a method of computing interest...

Question 13

Use the following two columns of items to answer the matching questions below:
-unsecured loan
A)disclosure of information including a balance sheet and cash flow statement
B)a contract that specifies the terms of the loan agreed to by the borrower and lender
C)loan that is not backed by collateral
D)life or duration of a loan

Accepted Answer

The answer of Use the following two columns of items...

Question 14

Shopping for automobile insurance should begin immediately after you close the deal on the car.

Accepted Answer

A) True 
 B)False

Question 15

Considerations in selecting a car should include all of the following, except

Accepted Answer

A)  what kind of car you really want, regardless of what you need. 
B)  the size of the car. 
C)  the price of the car. 
D)  the size of the engine and fuel economy. 
A)  what kind of car you really want, regardless of what you need. 
B)  the size of the car. 
C)  the price of the car. 
D)  the size of the engine and fuel economy.

Question 16

Which of the following is not an interest rate calculation method discussed in the text?

Accepted Answer

A)  Annual percentage rate or APR 
B)  Sum of the digits interest 
C)  Simple interest 
D)  Add-on interest 
A)  Annual percentage rate or APR 
B)  Sum of the digits interest 
C)  Simple interest 
D)  Add-on interest

Question 17

The decision to purchase versus lease a car is highly dependent on the estimated market value of the car at the end of the lease period.

Accepted Answer

A) True 
 B)False

Question 18

The more expensive the car, the ________ the payments, and the ________ you can put toward other investments.

Accepted Answer

A)  higher; more 
B)  higher; less 
C)  lower; less 
D)  lower; more 
A)  higher; more 
B)  higher; less 
C)  lower; less 
D)  lower; more

Question 19

All of the following cash needs are appropriately sourced from a home equity loan versus credit card or short-term personal loan, except for

Accepted Answer

A)  renovating your home. 
B)  buying a new car which you plan to keep for 10 years. 
C)  going to Disneyworld with your family. 
D)  A, B and C are all correct. 
A)  renovating your home. 
B)  buying a new car which you plan to keep for 10 years. 
C)  going to Disneyworld with your family. 
D)  A, B and C are all correct.

Question 20

Which of the following is a true statement about student loans?

Accepted Answer

A)  All student loans are provided by the U.S. government. 
B)  All student loans have fixed interest rates. 
C)  Interest payments on some loans are deferred until the students graduate and enter the workforce. 
D)  Interest is tax deductible for those at all income levels. 
A)  All student loans are provided by the U.S. government. 
B)  All student loans have fixed interest rates. 
C)  Interest payments on some loans are deferred until the students graduate and enter the workforce. 
D)  Interest is tax deductible for those at all income levels.

Common practices used by dishonest lenders include all of the following, except the lender

Home equity is defined as the market value of the home less the debt owed on the home.

Purchasing a car is a big decision. Therefore, you should not

You could reduce the size of your monthly loan payments by

Regarding the amount of money borrowed on a loan, all of the following are true, except

Buying a new car online is just about as efficient as buying an airline ticket or a book.

Determining the amount of money you can afford to borrow on a personal loan is a decision that should be included in your personal financial plan.

It is usually better to lease a vehicle than buy one, since you are not responsible for the repairs or maintenance on a leased car.

In securing personal loans from family members or friends, the loan agreement should be verbal or just consist of a "gentlemen's understanding."

The APR measures the finance expenses (including interest and all other expenses) on a loan on a(n)

________ is a method of computing interest based on the existing principal amount of the loan.

Shopping for automobile insurance should begin immediately after you close the deal on the car.

Considerations in selecting a car should include all of the following, except

Which of the following is not an interest rate calculation method discussed in the text?

The decision to purchase versus lease a car is highly dependent on the estimated market value of the car at the end of the lease period.

The more expensive the car, the the payments, and the you can put toward other investments.

All of the following cash needs are appropriately sourced from a home equity loan versus credit card or short-term personal loan, except for

Which of the following is a true statement about student loans?

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

Exam 9: Personal Loans

Common practices used by dishonest lenders include all of the following, except the lender

Home equity is defined as the market value of the home less the debt owed on the home.

Purchasing a car is a big decision. Therefore, you should not

You could reduce the size of your monthly loan payments by

Regarding the amount of money borrowed on a loan, all of the following are true, except

Buying a new car online is just about as efficient as buying an airline ticket or a book.

Determining the amount of money you can afford to borrow on a personal loan is a decision that should be included in your personal financial plan.

It is usually better to lease a vehicle than buy one, since you are not responsible for the repairs or maintenance on a leased car.

In securing personal loans from family members or friends, the loan agreement should be verbal or just consist of a "gentlemen's understanding."

The APR measures the finance expenses (including interest and all other expenses) on a loan on a(n)

________ is a method of computing interest based on the existing principal amount of the loan.

Shopping for automobile insurance should begin immediately after you close the deal on the car.

Considerations in selecting a car should include all of the following, except

Which of the following is not an interest rate calculation method discussed in the text?

The decision to purchase versus lease a car is highly dependent on the estimated market value of the car at the end of the lease period.

The more expensive the car, the ________ the payments, and the ________ you can put toward other investments.

All of the following cash needs are appropriately sourced from a home equity loan versus credit card or short-term personal loan, except for

Which of the following is a true statement about student loans?

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

The more expensive the car, the the payments, and the you can put toward other investments.