Question 1

In general, you will receive more favorable terms on a secured loan than on an unsecured loan.

Accepted Answer

A) True 
 B)False

Question 2

When borrowing money from a family member or a friend, the loan agreement should be in writing and signed by all parties to avoid any possible misinterpretations.

Accepted Answer

A) True 
 B)False

Question 3

Rick needs an advance on his $600 bi-weekly paycheck. He goes to Cash King where he writes them a check for $690 and dates the check two weeks from today. The cost of financing Rick's payday loan is

Accepted Answer

A)  391%. 
B)  521%. 
C)  261%. 
D)  547%. 
A)  391%. 
B)  521%. 
C)  261%. 
D)  547%.

Question 4

Financial institutions typically provide home equity loans up to ________ of the value of the equity in a home.

Accepted Answer

A)  98% 
B)  80% 
C)  70% 
D)  45% 
A)  98% 
B)  80% 
C)  70% 
D)  45%

Question 5

The Truth-in-Lending Act (1969) requires which of the following?

Accepted Answer

A)  Adherence to the interest rates established by the Federal Reserve 
B)  Specifying loan rate standardization 
C)  Disclosure of only interest charges but no other fee 
D)  All of the above 
A)  Adherence to the interest rates established by the Federal Reserve 
B)  Specifying loan rate standardization 
C)  Disclosure of only interest charges but no other fee 
D)  All of the above

Question 6

Lucky Louie applied for a $5,000 loan payable in one year and was provided the following data; interest due at payoff of $750, application fee $100, credit check $75, processing fee $75. What is the APR of Louie's loan?

Accepted Answer

A)  20% 
B)  17.5% 
C)  22.5% 
D)  There is not enough information to determine the answer. 
A)  20% 
B)  17.5% 
C)  22.5% 
D)  There is not enough information to determine the answer.

Question 7

A personal loan is different from a credit card in all of the following, except it

Accepted Answer

A)  is normally used to finance one large purchase. 
B)  has a specific repayment schedule. 
C)  can be used only once. 
D)  has a longer grace period. 
A)  is normally used to finance one large purchase. 
B)  has a specific repayment schedule. 
C)  can be used only once. 
D)  has a longer grace period.

Question 8

When negotiating the price of any car, which of the following statements is true?

Accepted Answer

A)  The car dealer earns a small profit if the customer doesn't negotiate and pays full price. 
B)  Dealers that negotiate will purposely price cars below the price for which they are willing to sell the car. 
C)  Salespeople are trained to act as if they are giving the car away. 
D)  Salespeople are uncertain of the price at which they can sell you the car until you begin negotiations. 
A)  The car dealer earns a small profit if the customer doesn't negotiate and pays full price. 
B)  Dealers that negotiate will purposely price cars below the price for which they are willing to sell the car. 
C)  Salespeople are trained to act as if they are giving the car away. 
D)  Salespeople are uncertain of the price at which they can sell you the car until you begin negotiations.

Question 9

For which of the following items would a personal loan be a better option than a credit card for a college student?

Accepted Answer

A)  Car maintenance expense 
B)  Tuition and dorm fees 
C)  Trips home for the holidays 
D)  Tickets to sporting events 
A)  Car maintenance expense 
B)  Tuition and dorm fees 
C)  Trips home for the holidays 
D)  Tickets to sporting events

Question 10

If you always drive cars many miles and keep them for 10 years, it would probably be best to

Accepted Answer

A)  lease a new car. 
B)  lease a used car. 
C)  buy a new car. 
D)  buy a used car. 
A)  lease a new car. 
B)  lease a used car. 
C)  buy a new car. 
D)  buy a used car.

Question 11

Auto loan Internet sites are a good source to estimate the maximum amount you can borrow, based on financial information you provide.

Accepted Answer

A) True 
 B)False

Question 12

Describe how personal loans affect your personal budget, income statement, and balance sheet. Has credit allowed you to expand your purchases?

Accepted Answer

This is a basic subjective answer. Inter

Question 13

List four components of a loan contract

Accepted Answer

Amount of loan, interest rate,

Question 14

All of the following provide personal loans, except

Accepted Answer

A)  commercial banks. 
B)  insurance companies. 
C)  finance companies. 
D)  credit unions. 
A)  commercial banks. 
B)  insurance companies. 
C)  finance companies. 
D)  credit unions.

Question 15

All of the following are true of peer-to-peer lending, except

Accepted Answer

A)  it involves online platforms. 
B)  borrowers generally have high FICO scores. 
C)  loans are available only for amounts less than $1,000. 
D)  interest rates may be lower than at a financial institution. 
A)  it involves online platforms. 
B)  borrowers generally have high FICO scores. 
C)  loans are available only for amounts less than $1,000. 
D)  interest rates may be lower than at a financial institution.

Question 16

The size of the monthly payment on a loan is dependent on all of the , except the

Accepted Answer

A)  principal borrowed. 
B)  interest rate. 
C)  borrower's age. 
D)  maturity. 
A)  principal borrowed. 
B)  interest rate. 
C)  borrower's age. 
D)  maturity.

Question 17

The personal loan process with a financial institution requires all of the following, except

Accepted Answer

A)  filling out an application. 
B)  sitting through an interview. 
C)  negotiating the loan contract. 
D)  negotiating the interest rate. 
A)  filling out an application. 
B)  sitting through an interview. 
C)  negotiating the loan contract. 
D)  negotiating the interest rate.

Question 18

Even an unsecured personal loan should be backed by collateral.

Accepted Answer

A) True 
 B)False

Question 19

Regarding automobile insurance,

Accepted Answer

A)  the best time to shop for rates is while you are at the car dealership. 
B)  most cars cost the same to insure if the driver is the same. 
C)  it is better to compare costs before you commit to buying a particular car. 
D)  you can lower your costs by buying a more expensive car that is less likely to have accidents. 
A)  the best time to shop for rates is while you are at the car dealership. 
B)  most cars cost the same to insure if the driver is the same. 
C)  it is better to compare costs before you commit to buying a particular car. 
D)  you can lower your costs by buying a more expensive car that is less likely to have accidents.

Question 20

What would be the total cost of leasing a vehicle for four years that requires a security deposit of $1,000 (which would be withdrawn from your portfolio, which earns 9% per year), has monthly lease payments of $500, and has a mileage restriction of 20,000 with excess mileage resulting in a 10 cents per mile charge. Assume that over the life of the lease you exceed the mileage limitations by a total of 8,000 miles.

Accepted Answer

A)  $24,000 
B)  $24,360 
C)  $24,800 
D)  $25,160 
A)  $24,000 
B)  $24,360 
C)  $24,800 
D)  $25,160

In general, you will receive more favorable terms on a secured loan than on an unsecured loan.

When borrowing money from a family member or a friend, the loan agreement should be in writing and signed by all parties to avoid any possible misinterpretations.

Rick needs an advance on his $600 bi-weekly paycheck. He goes to Cash King where he writes them a check for $690 and dates the check two weeks from today. The cost of financing Rick's payday loan is

Financial institutions typically provide home equity loans up to ________ of the value of the equity in a home.

The Truth-in-Lending Act (1969) requires which of the following?

Lucky Louie applied for a $5,000 loan payable in one year and was provided the following data; interest due at payoff of $750, application fee $100, credit check $75, processing fee $75. What is the APR of Louie's loan?

A personal loan is different from a credit card in all of the following, except it

When negotiating the price of any car, which of the following statements is true?

For which of the following items would a personal loan be a better option than a credit card for a college student?

If you always drive cars many miles and keep them for 10 years, it would probably be best to

Auto loan Internet sites are a good source to estimate the maximum amount you can borrow, based on financial information you provide.

Describe how personal loans affect your personal budget, income statement, and balance sheet. Has credit allowed you to expand your purchases?

List four components of a loan contract

All of the following provide personal loans, except

All of the following are true of peer-to-peer lending, except

The size of the monthly payment on a loan is dependent on all of the , except the

The personal loan process with a financial institution requires all of the following, except

Even an unsecured personal loan should be backed by collateral.

Regarding automobile insurance,

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

In general, you will receive more favorable terms on a secured loan than on an unsecured loan.

When borrowing money from a family member or a friend, the loan agreement should be in writing and signed by all parties to avoid any possible misinterpretations.

Rick needs an advance on his $600 bi-weekly paycheck. He goes to Cash King where he writes them a check for $690 and dates the check two weeks from today. The cost of financing Rick's payday loan is

Financial institutions typically provide home equity loans up to ________ of the value of the equity in a home.

The Truth-in-Lending Act (1969) requires which of the following?

Lucky Louie applied for a $5,000 loan payable in one year and was provided the following data; interest due at payoff of $750, application fee $100, credit check $75, processing fee $75. What is the APR of Louie's loan?

A personal loan is different from a credit card in all of the following, except it

When negotiating the price of any car, which of the following statements is true?

For which of the following items would a personal loan be a better option than a credit card for a college student?

If you always drive cars many miles and keep them for 10 years, it would probably be best to

Auto loan Internet sites are a good source to estimate the maximum amount you can borrow, based on financial information you provide.

Describe how personal loans affect your personal budget, income statement, and balance sheet. Has credit allowed you to expand your purchases?

List four components of a loan contract

All of the following provide personal loans, except

All of the following are true of peer-to-peer lending, except

The size of the monthly payment on a loan is dependent on all of the , except the

The personal loan process with a financial institution requires all of the following, except

Even an unsecured personal loan should be backed by collateral.

Regarding automobile insurance,

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