Question 1

If you own a home with a market value of $175,000 and you have an outstanding balance on your mortgage of $60,000,your home equity is

Accepted Answer

A)  $57,500. 
B)  $97,750. 
C)  $115,000. 
D)  $235,000. 
A)  $57,500. 
B)  $97,750. 
C)  $115,000. 
D)  $235,000.

Question 2

Name two tax credits available to help offset education costs.

Accepted Answer

American Opportunity Credit: a

Question 3

Which statement is false regarding consumer loans?

Accepted Answer

A)  Consumer loans are usually used for bigger purchases. 
B)  Consumer loans can range from open credit to credit cards. 
C)  Consumer loans are sometimes called "planned borrowing." 
D)  Consumer loans can range from single-payment loans to installment loans. 
A)  Consumer loans are usually used for bigger purchases. 
B)  Consumer loans can range from open credit to credit cards. 
C)  Consumer loans are sometimes called "planned borrowing." 
D)  Consumer loans can range from single-payment loans to installment loans.

Question 4

Which of the following statements would most correctly complete the following sentence? As the interest rate on a loan increases

Accepted Answer

A)  the loan maturity would decrease (other things held constant). 
B)  the payment amount would decrease (other things held constant). 
C)  the amoritization would increase (other things held constant). 
D)  the payment amount would increase (other things held constant). 
E)  none of the above. 
A)  the loan maturity would decrease (other things held constant). 
B)  the payment amount would decrease (other things held constant). 
C)  the amoritization would increase (other things held constant). 
D)  the payment amount would increase (other things held constant). 
E)  none of the above.

Question 5

Payday lenders

Accepted Answer

A)  make money by providing one-time assistance during a time of financial need. 
B)  make money by keeping borrowers in debt. 
C)  encourage repeat borrowing. 
D)  all of the above. 
A)  make money by providing one-time assistance during a time of financial need. 
B)  make money by keeping borrowers in debt. 
C)  encourage repeat borrowing. 
D)  all of the above.

Question 6

In driving around town one day,you noticed most of the payday loan companies were located close to the college and the local military base and there were none out in the newer neighborhoods.Why do you think this is so?

Accepted Answer

A)  The rent on these locations is less expensive. 
B)  Payday lenders tend to focus on less experienced borrowers who typically don't make a lot of money. 
C)  Because their terms are so affordable people with low incomes really take advantage of them. 
D)  There are zoning laws that require these types of locations for these types of services. 
A)  The rent on these locations is less expensive. 
B)  Payday lenders tend to focus on less experienced borrowers who typically don't make a lot of money. 
C)  Because their terms are so affordable people with low incomes really take advantage of them. 
D)  There are zoning laws that require these types of locations for these types of services.

Question 7

What is the loan clause stating that if you default on a secured loan,the lender can repossess whatever is secured,as well as bill you for the difference if that repossession does not cover what you owe?

Accepted Answer

A)  Insurance clause 
B)  Default clause 
C)  Recourse clause 
D)  Deficiency payments clause 
E)  None of the above 
A)  Insurance clause 
B)  Default clause 
C)  Recourse clause 
D)  Deficiency payments clause 
E)  None of the above

Question 8

When borrowing for college,one thing to keep in mind is that you're not just paying for one year of school.About half of all colleges practice what is called "front loading of grants," which means that

Accepted Answer

A)  grants awarded in the fall will be worth more than grants awarded in the spring semester. 
B)  your grants as a freshman will be more generous than your grants as a sophomore, junior, or senior. 
C)  your grants will progressively increase as your graduation date approaches. 
D)  the more your parents or guardians pay upfront for your college expenses, the less grants you will receive. 
A)  grants awarded in the fall will be worth more than grants awarded in the spring semester. 
B)  your grants as a freshman will be more generous than your grants as a sophomore, junior, or senior. 
C)  your grants will progressively increase as your graduation date approaches. 
D)  the more your parents or guardians pay upfront for your college expenses, the less grants you will receive.

Question 9

Debt consolidation loans can be a very good thing for some people but they can also be dangerous to some.Explain the benefits and dangers of a debt consolidation loan.

Accepted Answer

If you are fortunate enough to have suff

Question 10

A payday loan is a reasonable option if you need a luxury item like a big screen TV.

Accepted Answer

A) True 
 B)False

Question 11

Consumer loans are less formal than credit cards and/or other open credit.

Accepted Answer

A) True 
 B)False

Question 12

What can a couple seeking to get out of debt do?

Accepted Answer

A)  Avoid future use of credit card debt, except on a emergency basis. 
B)  Use savings to pay off current debt. 
C)  See if their creditors will restructure their loans. 
D)  Seek help from a reputable credit counselor. 
E)  All of the above are correct. 
A)  Avoid future use of credit card debt, except on a emergency basis. 
B)  Use savings to pay off current debt. 
C)  See if their creditors will restructure their loans. 
D)  Seek help from a reputable credit counselor. 
E)  All of the above are correct.

Question 13

Many lenders use the 28/36 rule in evaluating mortgage applications.If your mortgage payment itself is 28% of your gross income,that means that the remainder of your monthly debt must be ________% or less.

Accepted Answer

A)  6 
B)  7 
C)  8 
D)  28 
E)  36 
A)  6 
B)  7 
C)  8 
D)  28 
E)  36

Question 14

Variable-rate loans

Accepted Answer

A)  usually have rate caps that prevent them from varying too much. 
B)  always adjust every month. 
C)  are never a better option than fixed-rate loans. 
D)  all of the above. 
A)  usually have rate caps that prevent them from varying too much. 
B)  always adjust every month. 
C)  are never a better option than fixed-rate loans. 
D)  all of the above.

Question 15

________ is when a borrower is allowed to temporarily stop making student loan payments for a qualified reason such as an illness,financial hardship,or serving in a medical or dental internship or residency.

Accepted Answer

A)  Deferment 
B)  Delinquency 
C)  Forbearance 
D)  Default 
A)  Deferment 
B)  Delinquency 
C)  Forbearance 
D)  Default

Question 16

What will the courts do if you file Chapter 7 personal bankruptcy?

Accepted Answer

A)  Confiscate most of your assets. 
B)  Liquidate most of your assets to pay off creditors. 
C)  Eliminate most of your debts. 
D)  Allow you a chance to start again financially. 
E)  all of the above 
A)  Confiscate most of your assets. 
B)  Liquidate most of your assets to pay off creditors. 
C)  Eliminate most of your debts. 
D)  Allow you a chance to start again financially. 
E)  all of the above

Question 17

Not having health insurance could lead to filing for bankruptcy if one has incurred large medical expenses and is unable to pay these bills off in a timely manner.

Accepted Answer

A) True 
 B)False

Question 18

Why is the discount method more costly than the simple interest method on a single-payment loan?

Accepted Answer

Under the discount method,with

Question 19

Suppose that you are interested in buying a home,but are unsure of how much you can afford.What is the best way to determine your prospects for obtaining a mortgage?

Accepted Answer

A)  Calculate your debt limit ratio. 
B)  Figure the 28/36 rule. 
C)  Determine what your mortgage payment will be. 
D)  Determine what your income taxes will be. 
E)  Both B and C are correct answers. 
A)  Calculate your debt limit ratio. 
B)  Figure the 28/36 rule. 
C)  Determine what your mortgage payment will be. 
D)  Determine what your income taxes will be. 
E)  Both B and C are correct answers.

Question 20

What are the risks to the borrower with adjustable-rate loans?

Accepted Answer

A)  During times of inflation your salary may increase during the term of the loan. 
B)  That the market rates of interest may increase during the term of the loan. 
C)  It is harder to budget for loan payments that may increase during the term of the loan. 
D)  Both B and C are correct. 
A)  During times of inflation your salary may increase during the term of the loan. 
B)  That the market rates of interest may increase during the term of the loan. 
C)  It is harder to budget for loan payments that may increase during the term of the loan. 
D)  Both B and C are correct.

If you own a home with a market value of $175,000 and you have an outstanding balance on your mortgage of $60,000,your home equity is

Name two tax credits available to help offset education costs.

Which statement is false regarding consumer loans?

Which of the following statements would most correctly complete the following sentence? As the interest rate on a loan increases

Payday lenders

In driving around town one day,you noticed most of the payday loan companies were located close to the college and the local military base and there were none out in the newer neighborhoods.Why do you think this is so?

What is the loan clause stating that if you default on a secured loan,the lender can repossess whatever is secured,as well as bill you for the difference if that repossession does not cover what you owe?

When borrowing for college,one thing to keep in mind is that you're not just paying for one year of school.About half of all colleges practice what is called "front loading of grants," which means that

Debt consolidation loans can be a very good thing for some people but they can also be dangerous to some.Explain the benefits and dangers of a debt consolidation loan.

A payday loan is a reasonable option if you need a luxury item like a big screen TV.

Consumer loans are less formal than credit cards and/or other open credit.

What can a couple seeking to get out of debt do?

Many lenders use the 28/36 rule in evaluating mortgage applications.If your mortgage payment itself is 28% of your gross income,that means that the remainder of your monthly debt must be ________% or less.

Variable-rate loans

________ is when a borrower is allowed to temporarily stop making student loan payments for a qualified reason such as an illness,financial hardship,or serving in a medical or dental internship or residency.

What will the courts do if you file Chapter 7 personal bankruptcy?

Not having health insurance could lead to filing for bankruptcy if one has incurred large medical expenses and is unable to pay these bills off in a timely manner.

Why is the discount method more costly than the simple interest method on a single-payment loan?

Suppose that you are interested in buying a home,but are unsure of how much you can afford.What is the best way to determine your prospects for obtaining a mortgage?

What are the risks to the borrower with adjustable-rate loans?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Exam 7: Student and Consumer Loans: The Role of Planned Borrowing

If you own a home with a market value of $175,000 and you have an outstanding balance on your mortgage of $60,000,your home equity is

Name two tax credits available to help offset education costs.

Which statement is false regarding consumer loans?

Which of the following statements would most correctly complete the following sentence? As the interest rate on a loan increases

Payday lenders

In driving around town one day,you noticed most of the payday loan companies were located close to the college and the local military base and there were none out in the newer neighborhoods.Why do you think this is so?

What is the loan clause stating that if you default on a secured loan,the lender can repossess whatever is secured,as well as bill you for the difference if that repossession does not cover what you owe?

When borrowing for college,one thing to keep in mind is that you're not just paying for one year of school.About half of all colleges practice what is called "front loading of grants," which means that

Debt consolidation loans can be a very good thing for some people but they can also be dangerous to some.Explain the benefits and dangers of a debt consolidation loan.

A payday loan is a reasonable option if you need a luxury item like a big screen TV.

Consumer loans are less formal than credit cards and/or other open credit.

What can a couple seeking to get out of debt do?

Many lenders use the 28/36 rule in evaluating mortgage applications.If your mortgage payment itself is 28% of your gross income,that means that the remainder of your monthly debt must be ________% or less.

Variable-rate loans

________ is when a borrower is allowed to temporarily stop making student loan payments for a qualified reason such as an illness,financial hardship,or serving in a medical or dental internship or residency.

What will the courts do if you file Chapter 7 personal bankruptcy?

Not having health insurance could lead to filing for bankruptcy if one has incurred large medical expenses and is unable to pay these bills off in a timely manner.

Why is the discount method more costly than the simple interest method on a single-payment loan?

Suppose that you are interested in buying a home,but are unsure of how much you can afford.What is the best way to determine your prospects for obtaining a mortgage?

What are the risks to the borrower with adjustable-rate loans?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters