Question 1

The loan contract identifies all of the following, except

Accepted Answer

A)  loan officer. 
B)  maturity. 
C)  loan repayment schedule. 
D)  collateral. 
A)  loan officer. 
B)  maturity. 
C)  loan repayment schedule. 
D)  collateral.

Question 2

Use the following two columns of items to answer the matching questions below:
-loan application
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 3

Which of the following is a key benefit of leasing?

Accepted Answer

A)  You do not have to fill out a credit application. 
B)  You do not have to maintain the car since you do not own it. 
C)  You are able to drive a more expensive car for the same monthly payment versus buying. 
D)  A, B and C are all correct. 
A)  You do not have to fill out a credit application. 
B)  You do not have to maintain the car since you do not own it. 
C)  You are able to drive a more expensive car for the same monthly payment versus buying. 
D)  A, B and C are all correct.

Question 4

Which of the following items must you provide when applying for a loan in order to prove you have collateral to back your loan?

Accepted Answer

A)  Personal cash flow statement 
B)  Paycheck stub 
C)  Personal balance sheet 
D)  A and C are correct 
A)  Personal cash flow statement 
B)  Paycheck stub 
C)  Personal balance sheet 
D)  A and C are correct

Question 5

Over the life of a loan, the payment to principal ________ and the portion to interest expense ________.

Accepted Answer

A)  increases; increases 
B)  decreases; increases 
C)  increases; decreases 
D)  decreases; decreases 
A)  increases; increases 
B)  decreases; increases 
C)  increases; decreases 
D)  decreases; decreases

Question 6

The document that specifies the term of the loan as agreed to by the borrower and lender is called the

Accepted Answer

A)  loan repayment schedule. 
B)  loan contract. 
C)  loan application. 
D)  terms of agreement. 
A)  loan repayment schedule. 
B)  loan contract. 
C)  loan application. 
D)  terms of agreement.

Question 7

Use the following two columns of items to answer the matching questions below:
-collateral
A)assets of a borrower that back a secured loan
B)rate that measures the finance expenses
C)interest rate multiplied by the principal

Accepted Answer

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

Question 8

Which of the following is not usually used as collateral for a loan?

Accepted Answer

A)  A boat 
B)  Clothing 
C)  A car 
D)  A house 
A)  A boat 
B)  Clothing 
C)  A car 
D)  A house

Question 9

Use the following two columns of items to answer the matching questions below:
-APR
A)assets of a borrower that back a secured loan
B)rate that measures the finance expenses
C)interest rate multiplied by the principal

Accepted Answer

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

Question 10

Since not all student loans are issued at the same interest rate over the course of a student's education year, once the student graduates and begins working and is starting to pay back the loans they should

Accepted Answer

A)  defer payment as long as possible. 
B)  make only the minimum payments. 
C)  prioritize the loans from highest interest rate to lowest interest rate and use excess cash flow to make additional payments on the high rate loans. 
D)  pay all loans at an equal pace since they all count in your credit score. 
A)  defer payment as long as possible. 
B)  make only the minimum payments. 
C)  prioritize the loans from highest interest rate to lowest interest rate and use excess cash flow to make additional payments on the high rate loans. 
D)  pay all loans at an equal pace since they all count in your credit score.

Question 11

If the interest rates are the same, a loan using add-on interest will have higher payments and charges than a loan using simple interest.

Accepted Answer

A) True 
 B)False

Question 12

Which is true regarding resale value of cars?

Accepted Answer

A)  You can't really determine the resale value very accurately before you buy a car. 
B)  You are always better off to buy a higher priced car with a greater resale value. 
C)  You are always better off to buy a lower priced car with a lower resale value. 
D)  Resale values can be determined from the Internet and other sources and should be a consideration in buying a car. 
A)  You can't really determine the resale value very accurately before you buy a car. 
B)  You are always better off to buy a higher priced car with a greater resale value. 
C)  You are always better off to buy a lower priced car with a lower resale value. 
D)  Resale values can be determined from the Internet and other sources and should be a consideration in buying a car.

Question 13

You obtain a loan of $3,000 based on simple interest with an annual interest rate of 12%, or 1% a month. If the first payment is $300, how much is the principal portion of the payment?

Accepted Answer

A)  $27 
B)  $270 
C)  $280 
D)  $295 
A)  $27 
B)  $270 
C)  $280 
D)  $295

Question 14

When deciding whether to trade in a car or sell it privately, which of the following is not a consideration?

Accepted Answer

A)  "ACV" or actual cash value being offered by the dealer 
B)  Private sale price you think you can achieve if you sell the car yourself 
C)  Sales tax offset for the trade-in offered by many states 
D)  Year, make and model of the car 
A)  "ACV" or actual cash value being offered by the dealer 
B)  Private sale price you think you can achieve if you sell the car yourself 
C)  Sales tax offset for the trade-in offered by many states 
D)  Year, make and model of the car

Question 15

When applying for a personal loan, you will be required to fill out a loan application but you will seldom need a personal balance sheet or a personal cash flow statement.

Accepted Answer

A) True 
 B)False

Question 16

Frank purchased his home in 1997 for $130,000. He added an addition costing $35,000. The current tax assessed value is $80,000 while the current market value is $185,000. If Frank's current mortgage balance is $95,000, his equity in his home is

Accepted Answer

A)  $130,000. 
B)  $165,000. 
C)  $90,000. 
D)  $70,000. 
A)  $130,000. 
B)  $165,000. 
C)  $90,000. 
D)  $70,000.

Question 17

In the past you have purchased cars that you have driven for 10 years or more. The mileage on these vehicles usually exceeded 100,000 and therefore you would just give them to a younger family member. Based on this history, your primary financial consideration in selecting a car will be

Accepted Answer

A)  resale value. 
B)  financing rate. 
C)  repair expense. 
D)  personal preference. 
A)  resale value. 
B)  financing rate. 
C)  repair expense. 
D)  personal preference.

Question 18

All of the following are true of a home equity loan, except it

Accepted Answer

A)  provides you with a line of credit or a lump sum of money, depending on the type of loan. 
B)  is a good way to combine different kinds of debt. 
C)  may be tax deductible. 
D)  allows you to borrow up to 20% of the market value of your home. 
A)  provides you with a line of credit or a lump sum of money, depending on the type of loan. 
B)  is a good way to combine different kinds of debt. 
C)  may be tax deductible. 
D)  allows you to borrow up to 20% of the market value of your home.

Question 19

In which of the following scenarios would you favor leasing over purchasing a car?

Accepted Answer

A)  The number of miles that you drive each year varies significantly and is hard to predict. 
B)  Repair expenses on the car are very low. 
C)  The car in question is one whose value depreciates rapidly. 
D)  All of the above 
A)  The number of miles that you drive each year varies significantly and is hard to predict. 
B)  Repair expenses on the car are very low. 
C)  The car in question is one whose value depreciates rapidly. 
D)  All of the above

Question 20

Use the following two columns of items to answer the matching questions below:
-maturity
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...

The loan contract identifies all of the following, except

Which of the following is a key benefit of leasing?

Which of the following items must you provide when applying for a loan in order to prove you have collateral to back your loan?

Over the life of a loan, the payment to principal and the portion to interest expense .

The document that specifies the term of the loan as agreed to by the borrower and lender is called the

Use the following two columns of items to answer the matching questions below: -collateral A)assets of a borrower that back a secured loan B)rate that measures the finance expenses C)interest rate multiplied by the principal

Which of the following is not usually used as collateral for a loan?

Use the following two columns of items to answer the matching questions below: -APR A)assets of a borrower that back a secured loan B)rate that measures the finance expenses C)interest rate multiplied by the principal

Since not all student loans are issued at the same interest rate over the course of a student's education year, once the student graduates and begins working and is starting to pay back the loans they should

If the interest rates are the same, a loan using add-on interest will have higher payments and charges than a loan using simple interest.

Which is true regarding resale value of cars?

You obtain a loan of $3,000 based on simple interest with an annual interest rate of 12%, or 1% a month. If the first payment is $300, how much is the principal portion of the payment?

When deciding whether to trade in a car or sell it privately, which of the following is not a consideration?

When applying for a personal loan, you will be required to fill out a loan application but you will seldom need a personal balance sheet or a personal cash flow statement.

Frank purchased his home in 1997 for $130,000. He added an addition costing $35,000. The current tax assessed value is $80,000 while the current market value is $185,000. If Frank's current mortgage balance is $95,000, his equity in his home is

In the past you have purchased cars that you have driven for 10 years or more. The mileage on these vehicles usually exceeded 100,000 and therefore you would just give them to a younger family member. Based on this history, your primary financial consideration in selecting a car will be

All of the following are true of a home equity loan, except it

In which of the following scenarios would you favor leasing over purchasing a car?

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

The loan contract identifies all of the following, except

Which of the following is a key benefit of leasing?

Which of the following items must you provide when applying for a loan in order to prove you have collateral to back your loan?

Over the life of a loan, the payment to principal ________ and the portion to interest expense ________.

The document that specifies the term of the loan as agreed to by the borrower and lender is called the

Use the following two columns of items to answer the matching questions below: -collateral A)assets of a borrower that back a secured loan B)rate that measures the finance expenses C)interest rate multiplied by the principal

Which of the following is not usually used as collateral for a loan?

Use the following two columns of items to answer the matching questions below: -APR A)assets of a borrower that back a secured loan B)rate that measures the finance expenses C)interest rate multiplied by the principal

Since not all student loans are issued at the same interest rate over the course of a student's education year, once the student graduates and begins working and is starting to pay back the loans they should

If the interest rates are the same, a loan using add-on interest will have higher payments and charges than a loan using simple interest.

Which is true regarding resale value of cars?

You obtain a loan of $3,000 based on simple interest with an annual interest rate of 12%, or 1% a month. If the first payment is $300, how much is the principal portion of the payment?

When deciding whether to trade in a car or sell it privately, which of the following is not a consideration?

When applying for a personal loan, you will be required to fill out a loan application but you will seldom need a personal balance sheet or a personal cash flow statement.

Frank purchased his home in 1997 for $130,000. He added an addition costing $35,000. The current tax assessed value is $80,000 while the current market value is $185,000. If Frank's current mortgage balance is $95,000, his equity in his home is

In the past you have purchased cars that you have driven for 10 years or more. The mileage on these vehicles usually exceeded 100,000 and therefore you would just give them to a younger family member. Based on this history, your primary financial consideration in selecting a car will be

All of the following are true of a home equity loan, except it

In which of the following scenarios would you favor leasing over purchasing a car?

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

Over the life of a loan, the payment to principal and the portion to interest expense .