Question 1

If the maximum loan-to-value ratio that a lender will accept on a house costing $100,000 is 80%, then the borrower must make a down payment of at least:

Accepted Answer

A) $100,000. 
B) $80,000. 
C) $180,000. 
D) $20,000. 
E) $120,000. 
A) $100,000. 
B) $80,000. 
C) $180,000. 
D) $20,000. 
E) $120,000.

Question 2

Fees charged by lenders at the time they grant a mortgage loan are called:

Accepted Answer

A) mortgage points. 
B) down payments. 
C) add-on charges. 
D) commissions. 
E) loan discounts. 
A) mortgage points. 
B) down payments. 
C) add-on charges. 
D) commissions. 
E) loan discounts.

Question 3

At the end of your car lease period, you intend to turn in the car, and you will not pay extra at that time based on the residual value of the car. You have a(n)_____ lease.

Accepted Answer

A) residual 
B) open-end 
C) purchase option 
D) closed-end 
E) money factor 
A) residual 
B) open-end 
C) purchase option 
D) closed-end 
E) money factor

Question 4

Greg has negotiated a $20,000 price on a new pickup truck. The manufacturer is offering a $1,500 rebate or 3.9%, 3-year financing. Greg is also able to get 7%, 3-year financing from his credit union. If Greg plans to finance $18,000 over 3 years, should he take the 3.9% financing or the 7% financing? (Show all work and round to two decimal places.)

Accepted Answer

Calculation of PMT for 3.9%, 3-year fina

Question 5

The financing rate on a lease is called the:

Accepted Answer

A) lease point. 
B) residual rate. 
C) money factor. 
D) purchase option. 
E) capitalized cost. 
A) lease point. 
B) residual rate. 
C) money factor. 
D) purchase option. 
E) capitalized cost.

Question 6

Jacob has taken an SUV on lease from Free Cruisers Inc. for a period of 4 years. Jacob does not need to pay any extra amount when he turns in the vehicle because he didn't exceed the mileage specified in the lease and the SUV is not damaged. He has a:

Accepted Answer

A) residual lease. 
B) closed-end lease. 
C) purchase option lease. 
D) right to early termination lease. 
E) reassignment option lease. 
A) residual lease. 
B) closed-end lease. 
C) purchase option lease. 
D) right to early termination lease. 
E) reassignment option lease.

Question 7

The price of the car you are leasing is called the:

Accepted Answer

A) money factor. 
B) capitalized cost. 
C) residual value. 
D) purchase option. 
E) capital cost reduction. 
A) money factor. 
B) capitalized cost. 
C) residual value. 
D) purchase option. 
E) capital cost reduction.

Question 8

The seller of a house typically pays the:

Accepted Answer

A) appraisal fee. 
B) loan application fee. 
C) real estate agent's commission. 
D) title search and insurance. 
E) mortgage points. 
A) appraisal fee. 
B) loan application fee. 
C) real estate agent's commission. 
D) title search and insurance. 
E) mortgage points.

Question 9

Janet is considering the purchase of a condo for $150,000 during a recession phase, partly financed by a mortgage. She is due to retire in a few years. If she cannot make her mortgage payments on time, she is bound to incur a:

Accepted Answer

A) neutral equity on her property. 
B) reduced residual value of the property. 
C) higher rent ratio. 
D) foreclosure of her house. 
E) fine from the local government. 
A) neutral equity on her property. 
B) reduced residual value of the property. 
C) higher rent ratio. 
D) foreclosure of her house. 
E) fine from the local government.

Question 10

If your lender charges 1.5 mortgage points on a house selling for $100,000, on which there is a $90,000 loan, the points will cost you:

Accepted Answer

A) $1,350. 
B) $1,500. 
C) $2,850. 
D) $150. 
E) $900. 
A) $1,350. 
B) $1,500. 
C) $2,850. 
D) $150. 
E) $900.

Question 11

When shopping for a lease, you want:

Accepted Answer

A) a high insurance cost. 
B) a low capitalized cost. 
C) a high money factor. 
D) a low residual value. 
E) high lease payments. 
A) a high insurance cost. 
B) a low capitalized cost. 
C) a high money factor. 
D) a low residual value. 
E) high lease payments.

Question 12

The monthly interest on your adjustable-rate mortgage was $690. You paid $650 as your monthly payment on the loan leading to an increase in the principal balance. This is an example of a(n):

Accepted Answer

A) growing equity. 
B) negative amortization. 
C) fixed interest expense. 
D) shrinking principal. 
E) indexed equity. 
A) growing equity. 
B) negative amortization. 
C) fixed interest expense. 
D) shrinking principal. 
E) indexed equity.

Question 13

Leslie has been offered the choice of either a $1,000 rebate or a 5.5%, 48-month loan for the new car she is purchasing. If Leslie will be financing $15,000 and can get a 7.5%, 48-month loan at her credit union, should she take the $1,000 rebate or the 5.5% loan? (Show all work.)

Accepted Answer

Calculation of PMT for 7.5%, 48-month lo

Question 14

The data in a Multiple Listing Service (MLS):

Accepted Answer

A) eliminate the need for a real estate agent. 
B) are accessible to buyers and sellers directly. 
C) include the entire ownership history of the listed properties. 
D) deal only with undervalued properties that are authorized by the government within a geographic location. 
E) consist of a comprehensive listing of properties for sale in a given community area. 
A) eliminate the need for a real estate agent. 
B) are accessible to buyers and sellers directly. 
C) include the entire ownership history of the listed properties. 
D) deal only with undervalued properties that are authorized by the government within a geographic location. 
E) consist of a comprehensive listing of properties for sale in a given community area.

Question 15

If the interest rate and monthly mortgage payment do not change over the life of your mortgage, you have a(n):

Accepted Answer

A) reverse-annuity mortgage. 
B) fixed-rate mortgage. 
C) adjustable-rate mortgage. 
D) rollover mortgage. 
E) graduated-payment mortgage. 
A) reverse-annuity mortgage. 
B) fixed-rate mortgage. 
C) adjustable-rate mortgage. 
D) rollover mortgage. 
E) graduated-payment mortgage.

Question 16

As home prices have fallen in recent years, the rent ratio:

Accepted Answer

A) and rent attractiveness have increased. 
B) and rent attractiveness have decreased. 
C) has increased and rent attractiveness has decreased. 
D) has decreased and rent attractiveness has increased. 
E) has increased and rent attractiveness has stabilized. 
A) and rent attractiveness have increased. 
B) and rent attractiveness have decreased. 
C) has increased and rent attractiveness has decreased. 
D) has decreased and rent attractiveness has increased. 
E) has increased and rent attractiveness has stabilized.

Question 17

A lender will usually require a loan-to-value ratio of _____ or less for a borrower to avoid having to pay private mortgage insurance (PMI).

Accepted Answer

A) 75% 
B) 80% 
C) 85% 
D) 90% 
E) 95% 
A) 75% 
B) 80% 
C) 85% 
D) 90% 
E) 95%

Question 18

The property listing in a local Multiple Listing Service (MLS)cannot be accessed by all buyers and sellers.

Accepted Answer

A) True 
 B)False

Question 19

Jane and Smith are considering the purchase of a home in downtown Minneapolis. They approached Larson's Mortgagers Inc. to arrange for the financing needed for their home. This process of arranging with a mortgage lender in advance of buying a home is called:

Accepted Answer

A) foreclosure. 
B) a contingency auction. 
C) prequalification. 
D) a real estate short sale. 
E) diversification. 
A) foreclosure. 
B) a contingency auction. 
C) prequalification. 
D) a real estate short sale. 
E) diversification.

Question 20

Assume that you have taken a car on a closed-end lease for a period of 5 years. At the end of the fifth year, you would need to pay additional money only when:

Accepted Answer

A) fuel costs have been higher than expected. 
B) the residual value is more than expected. 
C) the mileage limits are exceeded. 
D) the company upgrades the automobile. 
E) the driver does not have automobile insurance. 
A) fuel costs have been higher than expected. 
B) the residual value is more than expected. 
C) the mileage limits are exceeded. 
D) the company upgrades the automobile. 
E) the driver does not have automobile insurance.

If the maximum loan-to-value ratio that a lender will accept on a house costing $100,000 is 80%, then the borrower must make a down payment of at least:

Fees charged by lenders at the time they grant a mortgage loan are called:

At the end of your car lease period, you intend to turn in the car, and you will not pay extra at that time based on the residual value of the car. You have a(n)_____ lease.

The financing rate on a lease is called the:

Jacob has taken an SUV on lease from Free Cruisers Inc. for a period of 4 years. Jacob does not need to pay any extra amount when he turns in the vehicle because he didn't exceed the mileage specified in the lease and the SUV is not damaged. He has a:

The price of the car you are leasing is called the:

The seller of a house typically pays the:

Janet is considering the purchase of a condo for $150,000 during a recession phase, partly financed by a mortgage. She is due to retire in a few years. If she cannot make her mortgage payments on time, she is bound to incur a:

If your lender charges 1.5 mortgage points on a house selling for $100,000, on which there is a $90,000 loan, the points will cost you:

When shopping for a lease, you want:

The monthly interest on your adjustable-rate mortgage was $690. You paid $650 as your monthly payment on the loan leading to an increase in the principal balance. This is an example of a(n):

Leslie has been offered the choice of either a $1,000 rebate or a 5.5%, 48-month loan for the new car she is purchasing. If Leslie will be financing $15,000 and can get a 7.5%, 48-month loan at her credit union, should she take the $1,000 rebate or the 5.5% loan? (Show all work.)

The data in a Multiple Listing Service (MLS):

If the interest rate and monthly mortgage payment do not change over the life of your mortgage, you have a(n):

As home prices have fallen in recent years, the rent ratio:

A lender will usually require a loan-to-value ratio of _____ or less for a borrower to avoid having to pay private mortgage insurance (PMI).

The property listing in a local Multiple Listing Service (MLS)cannot be accessed by all buyers and sellers.

Jane and Smith are considering the purchase of a home in downtown Minneapolis. They approached Larson's Mortgagers Inc. to arrange for the financing needed for their home. This process of arranging with a mortgage lender in advance of buying a home is called:

Assume that you have taken a car on a closed-end lease for a period of 5 years. At the end of the fifth year, you would need to pay additional money only when:

Understanding the Financial Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 5: Making Automobile and Housing Decisions

If the maximum loan-to-value ratio that a lender will accept on a house costing $100,000 is 80%, then the borrower must make a down payment of at least:

Fees charged by lenders at the time they grant a mortgage loan are called:

At the end of your car lease period, you intend to turn in the car, and you will not pay extra at that time based on the residual value of the car. You have a(n)_____ lease.

The financing rate on a lease is called the:

Jacob has taken an SUV on lease from Free Cruisers Inc. for a period of 4 years. Jacob does not need to pay any extra amount when he turns in the vehicle because he didn't exceed the mileage specified in the lease and the SUV is not damaged. He has a:

The price of the car you are leasing is called the:

The seller of a house typically pays the:

Janet is considering the purchase of a condo for $150,000 during a recession phase, partly financed by a mortgage. She is due to retire in a few years. If she cannot make her mortgage payments on time, she is bound to incur a:

If your lender charges 1.5 mortgage points on a house selling for $100,000, on which there is a $90,000 loan, the points will cost you:

When shopping for a lease, you want:

The monthly interest on your adjustable-rate mortgage was $690. You paid $650 as your monthly payment on the loan leading to an increase in the principal balance. This is an example of a(n):

Leslie has been offered the choice of either a $1,000 rebate or a 5.5%, 48-month loan for the new car she is purchasing. If Leslie will be financing $15,000 and can get a 7.5%, 48-month loan at her credit union, should she take the $1,000 rebate or the 5.5% loan? (Show all work.)

The data in a Multiple Listing Service (MLS):

If the interest rate and monthly mortgage payment do not change over the life of your mortgage, you have a(n):

As home prices have fallen in recent years, the rent ratio:

A lender will usually require a loan-to-value ratio of _____ or less for a borrower to avoid having to pay private mortgage insurance (PMI).

The property listing in a local Multiple Listing Service (MLS)cannot be accessed by all buyers and sellers.

Jane and Smith are considering the purchase of a home in downtown Minneapolis. They approached Larson's Mortgagers Inc. to arrange for the financing needed for their home. This process of arranging with a mortgage lender in advance of buying a home is called:

Assume that you have taken a car on a closed-end lease for a period of 5 years. At the end of the fifth year, you would need to pay additional money only when:

Understanding the Financial Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Preserving Your Estate

Filters