Question 1

Generally,renting would be preferred to buying when

Accepted Answer

A)  you have no money to make a down payment. 
B)  you know your job will be temporary. 
C)  you have just gone through a divorce. 
D)  all of these. 
E)  none of these. 
A)  you have no money to make a down payment. 
B)  you know your job will be temporary. 
C)  you have just gone through a divorce. 
D)  all of these. 
E)  none of these.

Question 2

The capital cost reduction on a vehicle lease is

Accepted Answer

A)  like the down payment on a loan. 
B)  the rate of interest on a lease. 
C)  the residual value at the end of the lease. 
D)  the depreciation on a lease. 
E)  the same as the purchase option on a lease. 
A)  like the down payment on a loan. 
B)  the rate of interest on a lease. 
C)  the residual value at the end of the lease. 
D)  the depreciation on a lease. 
E)  the same as the purchase option on a lease.

Question 3

Henry has $2,500 for a down payment and thinks he can afford monthly payments of $400.If he can finance a vehicle with an 8%,3-year loan,what is the maximum amount Henry can spend on the car?

Accepted Answer

A)  $12,765 
B)  $14,400 
C)  $14,079 
D)  $15,265 
E)  $16,879 
A)  $12,765 
B)  $14,400 
C)  $14,079 
D)  $15,265 
E)  $16,879

Question 4

You will need to purchase homeowners insurance equal to the purchase price of the house you are buying.

Accepted Answer

A) True 
 B)False

Question 5

A declining rent ratio indicates

Accepted Answer

A)  lower housing prices relative to renting 
B)  lower rent relative to housing prices 
C)  higher housing prices relative to renting 
D)  none of the above 
A)  lower housing prices relative to renting 
B)  lower rent relative to housing prices 
C)  higher housing prices relative to renting 
D)  none of the above

Question 6

First-time homebuyers can withdraw up to $10,000 from an IRA without penalty regardless of their age.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following are reasons people lease vehicles?

Accepted Answer

A)  Leasing is generally less expensive than buying. 
B)  Monthly payments for leases are generally less expensive than loan payments. 
C)  One can afford a more expensive car with the same monthly payment by leasing rather than buying. 
D)  b and c only 
E)  a,b,and c 
A)  Leasing is generally less expensive than buying. 
B)  Monthly payments for leases are generally less expensive than loan payments. 
C)  One can afford a more expensive car with the same monthly payment by leasing rather than buying. 
D)  b and c only 
E)  a,b,and c

Question 8

The interest rate is lower on a 6-year auto loan than on a 3-year auto loan

Accepted Answer

A) True 
 B)False

Question 9

An inflation hedge is an asset that increases in value at a rate equal to or greater than the rate of inflation.

Accepted Answer

A) True 
 B)False

Question 10

As a homeowner,the federal government may allow you to deduct interest expenses and taxes paid on the property.

Accepted Answer

A) True 
 B)False

Question 11

Dick and Jane (and their dog Spot)have just purchased a house and are calculating how much money they will need when the closing day rolls around.The purchase price is $200,000.They will make a 20% down payment,and they must pay 2 points on the loan.Closing costs should be 3% of the purchase price.What is the total dollar amount they will need at closing?

Accepted Answer

The answer of Dick and Jane (and their dog Spot)have...

Question 12

A lender will generally require mortgage insurance if the down payment is less than 20 percent.

Accepted Answer

A) True 
 B)False

Question 13

Pete and Pam want to purchase a new home but don't know how much mortgage they can qualify for.The lender requires total installment loan payments not exceed 32% of gross monthly income.Based on Pete and Pam's financial data below,what is the maximum monthly mortgage payment for which they can qualify?

Accepted Answer

A)  $1,700 
B)  $1,600 
C)  $ 900 
D)  $ 600 
E)  $ 500 
A)  $1,700 
B)  $1,600 
C)  $ 900 
D)  $ 600 
E)  $ 500

Question 14

When buying a used car,it is very important to have it checked by a reputable mechanic.

Accepted Answer

A) True 
 B)False

Question 15

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-As home prices have fallen the "rent ratio" has [increased | decreased].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the

Question 16

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-When buying a home,the [emotional | financial] factors often carry the greatest weight.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the

Question 17

The monthly payment is lower in a 6-year auto loan than on a 3-year auto loan.

Accepted Answer

A) True 
 B)False

Question 18

The market price of a house is $125,000 and the homebuyer will borrow $100,000.Two points will equal $2,500.

Accepted Answer

A) True 
 B)False

Question 19

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The earnest money deposit is a payment to the [real estate agent for his services | seller to show good faith when making an offer to buy].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the

Question 20

Earnest money deposits and contingency clauses are usually specified in the sale contract.

Accepted Answer

A) True 
 B)False

Generally,renting would be preferred to buying when

The capital cost reduction on a vehicle lease is

Henry has $2,500 for a down payment and thinks he can afford monthly payments of $400.If he can finance a vehicle with an 8%,3-year loan,what is the maximum amount Henry can spend on the car?

You will need to purchase homeowners insurance equal to the purchase price of the house you are buying.

A declining rent ratio indicates

First-time homebuyers can withdraw up to $10,000 from an IRA without penalty regardless of their age.

Which of the following are reasons people lease vehicles?

The interest rate is lower on a 6-year auto loan than on a 3-year auto loan

An inflation hedge is an asset that increases in value at a rate equal to or greater than the rate of inflation.

As a homeowner,the federal government may allow you to deduct interest expenses and taxes paid on the property.

A lender will generally require mortgage insurance if the down payment is less than 20 percent.

When buying a used car,it is very important to have it checked by a reputable mechanic.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -As home prices have fallen the "rent ratio" has [increased | decreased].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -When buying a home,the [emotional | financial] factors often carry the greatest weight.

The monthly payment is lower in a 6-year auto loan than on a 3-year auto loan.

The market price of a house is $125,000 and the homebuyer will borrow $100,000.Two points will equal $2,500.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The earnest money deposit is a payment to the [real estate agent for his services | seller to show good faith when making an offer to buy].

Earnest money deposits and contingency clauses are usually specified in the sale contract.

Understanding the Financial Planning 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

Planning for Retirement

Preserving Your Estate

Filters

Exam 5: Making Automobile and Housing Decisions

Generally,renting would be preferred to buying when

The capital cost reduction on a vehicle lease is

Henry has $2,500 for a down payment and thinks he can afford monthly payments of $400.If he can finance a vehicle with an 8%,3-year loan,what is the maximum amount Henry can spend on the car?

You will need to purchase homeowners insurance equal to the purchase price of the house you are buying.

A declining rent ratio indicates

First-time homebuyers can withdraw up to $10,000 from an IRA without penalty regardless of their age.

Which of the following are reasons people lease vehicles?

The interest rate is lower on a 6-year auto loan than on a 3-year auto loan

An inflation hedge is an asset that increases in value at a rate equal to or greater than the rate of inflation.

As a homeowner,the federal government may allow you to deduct interest expenses and taxes paid on the property.

A lender will generally require mortgage insurance if the down payment is less than 20 percent.

When buying a used car,it is very important to have it checked by a reputable mechanic.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -As home prices have fallen the "rent ratio" has [increased | decreased].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -When buying a home,the [emotional | financial] factors often carry the greatest weight.

The monthly payment is lower in a 6-year auto loan than on a 3-year auto loan.

The market price of a house is $125,000 and the homebuyer will borrow $100,000.Two points will equal $2,500.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The earnest money deposit is a payment to the [real estate agent for his services | seller to show good faith when making an offer to buy].

Earnest money deposits and contingency clauses are usually specified in the sale contract.

Understanding the Financial Planning 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

Planning for Retirement

Preserving Your Estate

Filters