Question 1

The Federal National Mortgage Association is

Accepted Answer

A)  a division of Housing and Urban Development (HU
D)  
B)  a division of the U. S. Treasury 
C)  an independent agency similar to the Federal Reserve 
D)  a government sponsored privately owned corporation 
A)  a division of Housing and Urban Development (HU
D)  
B)  a division of the U. S. Treasury 
C)  an independent agency similar to the Federal Reserve 
D)  a government sponsored privately owned corporation

Question 2

Government National Mortgage Association is

Accepted Answer

A)  a division of Housing and Urban Development (HU
D)  
B)  a division of the U. S. Treasury 
C)  an independent agency similar to the Federal Reserve 
D)  a government sponsored privately owned corporation 
A)  a division of Housing and Urban Development (HU
D)  
B)  a division of the U. S. Treasury 
C)  an independent agency similar to the Federal Reserve 
D)  a government sponsored privately owned corporation

Question 3

An assumable mortgage is one that assumes higher or lower interest rates when the lenders cost of funds changes.

Accepted Answer

A) True 
 B)False

Question 4

Credit cards are one example of

Accepted Answer

A)  open-end lines of credit 
B)  closed-end lines of credit 
C)  amortized payment loans 
D)  term loans 
A)  open-end lines of credit 
B)  closed-end lines of credit 
C)  amortized payment loans 
D)  term loans

Question 5

A typical loan-to-price ratio is

Accepted Answer

A)  90% 
B)  80% 
C)  70% 
D)  60% 
A)  90% 
B)  80% 
C)  70% 
D)  60%

Question 6

A rate floor in an ARM

Accepted Answer

A)  is the highest rate a borrower may pay 
B)  is the lowest rate a borrower may pay 
C)  part of the margin 
D)  may result in negative amortization 
A)  is the highest rate a borrower may pay 
B)  is the lowest rate a borrower may pay 
C)  part of the margin 
D)  may result in negative amortization

Question 7

Credit card issuers have intense nonprice competition.

Accepted Answer

A) True 
 B)False

Question 8

The finance charge is

Accepted Answer

A)  total dollar amount paid for the use of credit 
B)  the APR 
C)  determined by the actuarial method or the rule of 78 
D)  the interest cost plus other fees such as sales tax 
A)  total dollar amount paid for the use of credit 
B)  the APR 
C)  determined by the actuarial method or the rule of 78 
D)  the interest cost plus other fees such as sales tax

Question 9

Most mortgage loans in the United States are:

Accepted Answer

A)  ARMS 
B)  fixed rate, partially amortized 
C)  fixed rate, fully amortized, level payment 
D)  GEMS 
A)  ARMS 
B)  fixed rate, partially amortized 
C)  fixed rate, fully amortized, level payment 
D)  GEMS

Question 10

The law that requires public disclosure of lenders' compliance with CRA is

Accepted Answer

A)  Truth in Lending Act 
B)  Community Reinvestment Act 
C)  Equal Credit Opportunity Act 
D)  Financial Institutions Reform, Recovery, and Enforcement Act 
A)  Truth in Lending Act 
B)  Community Reinvestment Act 
C)  Equal Credit Opportunity Act 
D)  Financial Institutions Reform, Recovery, and Enforcement Act

Question 11

Applicants who have been denied credit have recourse under the

Accepted Answer

A)  Equal Credit Opportunity Act 
B)  Truth in Lending Act 
C)  Fair Credit Reporting Act 
D)  Right to Financial Privacy Act 
A)  Equal Credit Opportunity Act 
B)  Truth in Lending Act 
C)  Fair Credit Reporting Act 
D)  Right to Financial Privacy Act

Question 12

In a real estate portfolio, fixed rate mortgages are generally riskier than ARMs because the latter allows lenders to maintain a positive spread.

Accepted Answer

A) True 
 B)False

Question 13

Assumable loans change interest rates

Accepted Answer

A)  when interest rates increase 
B)  if the buydown provision is exercised 
C)  if the home is sold 
D)  none of the above 
A)  when interest rates increase 
B)  if the buydown provision is exercised 
C)  if the home is sold 
D)  none of the above

Question 14

Which of the following are noninstallment loans? There may be more than one correct answer.

Accepted Answer

A)  bridge-loans 
B)  single payment loans 
C)  open-end leases 
D)  closed-end leases 
A)  bridge-loans 
B)  single payment loans 
C)  open-end leases 
D)  closed-end leases

Question 15

Federal Reserve Regulation Z requires

Accepted Answer

A)  banks to maintain reserves against deposits 
B)  banks and other lenders to maintain reserves against deposits 
C)  lenders to advise consumers in writing about finance charges and costs before they make a loan 
D)  lenders to tell consumers about finance charges and costs before they make a loan so that they may compare credit costs 
A)  banks to maintain reserves against deposits 
B)  banks and other lenders to maintain reserves against deposits 
C)  lenders to advise consumers in writing about finance charges and costs before they make a loan 
D)  lenders to tell consumers about finance charges and costs before they make a loan so that they may compare credit costs

Question 16

For a given loan at the same interest rate, the add-on method produces lower finance charges than the discount method.

Accepted Answer

A) True 
 B)False

Question 17

Interest rate rebates on installment loans paid off before maturity may be determined by

Accepted Answer

A)  caps and floors 
B)  the APR 
C)  the actuarial method or the Rule of 78 
D)  all of the above 
A)  caps and floors 
B)  the APR 
C)  the actuarial method or the Rule of 78 
D)  all of the above

Question 18

Credit card and automobile loans are examples of "closed-end" loans.

Accepted Answer

A) True 
 B)False

Question 19

The term "mortgage" in common law refers to the right of ownership in connection with real estate.

Accepted Answer

A) True 
 B)False

Question 20

The basic idea behind ARMs is to allow lenders to adjust the returns on their portfolios to changes in the prices of new homes.

Accepted Answer

A) True 
 B)False

The Federal National Mortgage Association is

Government National Mortgage Association is

An assumable mortgage is one that assumes higher or lower interest rates when the lenders cost of funds changes.

Credit cards are one example of

A typical loan-to-price ratio is

A rate floor in an ARM

Credit card issuers have intense nonprice competition.

The finance charge is

Most mortgage loans in the United States are:

The law that requires public disclosure of lenders' compliance with CRA is

Applicants who have been denied credit have recourse under the

In a real estate portfolio, fixed rate mortgages are generally riskier than ARMs because the latter allows lenders to maintain a positive spread.

Assumable loans change interest rates

Which of the following are noninstallment loans? There may be more than one correct answer.

Federal Reserve Regulation Z requires

For a given loan at the same interest rate, the add-on method produces lower finance charges than the discount method.

Interest rate rebates on installment loans paid off before maturity may be determined by

Credit card and automobile loans are examples of "closed-end" loans.

The term "mortgage" in common law refers to the right of ownership in connection with real estate.

The basic idea behind ARMs is to allow lenders to adjust the returns on their portfolios to changes in the prices of new homes.

Functions and Forms of Banking

The Bank Regulatory Environment

Evaluating Bank Performance

Bank Valuation

An Overview of Assetliability Management Alm

Techniques of Assetliability Management: Futures, Options, and Swaps

Investment Management

Credit Evaluation Process

Commercial and Industrial Lending

Liquidity Management

Capital Management

Managing Liabilities

Off-Balance Sheet Activities

Securities, Investment Insurance Products

Other Financial Services

Electronic Banking

Global Financial Services

Filters

Exam 10: Real Estate and Consumer Lending

The Federal National Mortgage Association is

Government National Mortgage Association is

An assumable mortgage is one that assumes higher or lower interest rates when the lenders cost of funds changes.

Credit cards are one example of

A typical loan-to-price ratio is

A rate floor in an ARM

Credit card issuers have intense nonprice competition.

The finance charge is

Most mortgage loans in the United States are:

The law that requires public disclosure of lenders' compliance with CRA is

Applicants who have been denied credit have recourse under the

In a real estate portfolio, fixed rate mortgages are generally riskier than ARMs because the latter allows lenders to maintain a positive spread.

Assumable loans change interest rates

Which of the following are noninstallment loans? There may be more than one correct answer.

Federal Reserve Regulation Z requires

For a given loan at the same interest rate, the add-on method produces lower finance charges than the discount method.

Interest rate rebates on installment loans paid off before maturity may be determined by

Credit card and automobile loans are examples of "closed-end" loans.

The term "mortgage" in common law refers to the right of ownership in connection with real estate.

The basic idea behind ARMs is to allow lenders to adjust the returns on their portfolios to changes in the prices of new homes.

Functions and Forms of Banking

The Bank Regulatory Environment

Evaluating Bank Performance

Bank Valuation

An Overview of Assetliability Management Alm

Techniques of Assetliability Management: Futures, Options, and Swaps

Investment Management

Credit Evaluation Process

Commercial and Industrial Lending

Liquidity Management

Capital Management

Managing Liabilities

Off-Balance Sheet Activities

Securities, Investment Insurance Products

Other Financial Services

Electronic Banking

Global Financial Services

Filters