Question 1

Which of the following is true regarding auto loans?

Accepted Answer

A)  Longer term,lower rate,lower payment 
B)  Shorter term,lower rate,lower payment 
C)  Longer term,higher rate,lower payment 
D)  Shorter term,higher rate,higher payment 
A)  Longer term,lower rate,lower payment 
B)  Shorter term,lower rate,lower payment 
C)  Longer term,higher rate,lower payment 
D)  Shorter term,higher rate,higher payment

Question 2

____ is an up-front,one-time cost of home ownership.

Accepted Answer

A)  The down payment 
B)  Closing costs 
C)  Property taxes 
D)  Insurance 
E)  a and b 
A)  The down payment 
B)  Closing costs 
C)  Property taxes 
D)  Insurance 
E)  a and b

Question 3

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-A lender gives you a choice of an 80% loan-to-value ratio or a 90% loan-to-value ratio.The interest rate for the 80% loan-to-value ratio loan will typically be [higher | lower] than the 90%.

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 4

The monthly interest on your mortgage was $690; you paid $650.The result is

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 5

Leasing accounts for about ____ percent of all vehicles sold today.

Accepted Answer

A)  10 
B)  14 
C)  19 
D)  23 
E)  37 
A)  10 
B)  14 
C)  19 
D)  23 
E)  37

Question 6

A financial advantage of renting compared to purchasing housing is

Accepted Answer

A)  income tax treatment. 
B)  no need for a down payment. 
C)  required security deposit. 
D)  the legal obligation. 
E)  stable monthly payments. 
A)  income tax treatment. 
B)  no need for a down payment. 
C)  required security deposit. 
D)  the legal obligation. 
E)  stable monthly payments.

Question 7

____ is an ongoing cost of home ownership.

Accepted Answer

A)  The down payment 
B)  Closing costs 
C)  Property taxes 
D)  Sales taxes 
E)  Points 
A)  The down payment 
B)  Closing costs 
C)  Property taxes 
D)  Sales taxes 
E)  Points

Question 8

One would be more likely to pay discount points if she expected

Accepted Answer

A)  to live in the house a short period of time. 
B)  to live in the house a long period of time. 
C)  interest rates to go up. 
D)  interest rates to go down. 
E)  interest rates to remain constant. 
A)  to live in the house a short period of time. 
B)  to live in the house a long period of time. 
C)  interest rates to go up. 
D)  interest rates to go down. 
E)  interest rates to remain constant.

Question 9

Kurt has $4,500 for a down payment and thinks she can afford monthly payments of $300.If he can finance a vehicle with a 7%,4-year loan,what is the maximum amount Kurt can afford to spend on the car?

Accepted Answer

A)  $13,528 
B)  $14,400 
C)  $16,028 
D)  $17,028 
E)  $18,028 
A)  $13,528 
B)  $14,400 
C)  $16,028 
D)  $17,028 
E)  $18,028

Question 10

Negative amortization is possible with a fixed-rate mortgage.

Accepted Answer

A) True 
 B)False

Question 11

If a buyer withdraws from a transaction without a valid reason after signing a sales contract,he typically loses his earnest money.

Accepted Answer

A) True 
 B)False

Question 12

To make a legally binding offer on a car,you must sign a sales contract that specifies the offering price and all the conditions of your offer.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)  $100,000. 
B)  $ 80,000. 
C)  $ 50,000. 
D)  $ 20,000. 
E)  none of these. 
A)  $100,000. 
B)  $ 80,000. 
C)  $ 50,000. 
D)  $ 20,000. 
E)  none of these.

Question 14

Phil and Christina are recently married and are unsure of where they will be relocated after Christina finishes her residency in 9 months.Based on this information,which of the following housing recommendations would be most appropriate for them?

Accepted Answer

A)  Rent a home 
B)  Buy a condominium 
C)  Buy a single-family dwelling 
D)  Buy a cooperative apartment 
E)  Lease a car 
A)  Rent a home 
B)  Buy a condominium 
C)  Buy a single-family dwelling 
D)  Buy a cooperative apartment 
E)  Lease a car

Question 15

The largest single investment you will undertake in your lifetime will probably be the purchase of an automobile.

Accepted Answer

A) True 
 B)False

Question 16

The following is/are major source(s)of home mortgages:

Accepted Answer

A)  Commercial Banks 
B)  Thrift Institutions 
C)  Mortgage Bankers and Brokers 
D)  Credit Unions 
E)  All of the above 
A)  Commercial Banks 
B)  Thrift Institutions 
C)  Mortgage Bankers and Brokers 
D)  Credit Unions 
E)  All of the above

Question 17

Adjustable-rate mortgages with monthly payment caps can lead to negative amortization.

Accepted Answer

A) True 
 B)False

Question 18

If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 90 percent,then the borrower must make

Accepted Answer

A)  a minimum down payment of $10,000 plus closing costs. 
B)  a minimum down payment including closing costs of $10,000. 
C)  closing costs plus points of $10,000. 
D)  a maximum down payment of $10,000. 
E)  none of these. 
A)  a minimum down payment of $10,000 plus closing costs. 
B)  a minimum down payment including closing costs of $10,000. 
C)  closing costs plus points of $10,000. 
D)  a maximum down payment of $10,000. 
E)  none of these.

Question 19

Adjustable-rate mortgages with interest rate caps can lead to negative amortization.

Accepted Answer

A) True 
 B)False

Question 20

____ and ____ are often paid as part of one's house payment and held in an escrow account.

Accepted Answer

A)  Closing costs; interest 
B)  Insurance; real estate taxes 
C)  Principal; interest 
D)  Insurance; utilities 
E)  Utilities; real estate taxes 
A)  Closing costs; interest 
B)  Insurance; real estate taxes 
C)  Principal; interest 
D)  Insurance; utilities 
E)  Utilities; real estate taxes

Which of the following is true regarding auto loans?

____ is an up-front,one-time cost of home ownership.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -A lender gives you a choice of an 80% loan-to-value ratio or a 90% loan-to-value ratio.The interest rate for the 80% loan-to-value ratio loan will typically be [higher | lower] than the 90%.

The monthly interest on your mortgage was $690; you paid $650.The result is

Leasing accounts for about ____ percent of all vehicles sold today.

A financial advantage of renting compared to purchasing housing is

____ is an ongoing cost of home ownership.

One would be more likely to pay discount points if she expected

Kurt has $4,500 for a down payment and thinks she can afford monthly payments of $300.If he can finance a vehicle with a 7%,4-year loan,what is the maximum amount Kurt can afford to spend on the car?

Negative amortization is possible with a fixed-rate mortgage.

If a buyer withdraws from a transaction without a valid reason after signing a sales contract,he typically loses his earnest money.

To make a legally binding offer on a car,you must sign a sales contract that specifies the offering price and all the conditions of your offer.

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

Phil and Christina are recently married and are unsure of where they will be relocated after Christina finishes her residency in 9 months.Based on this information,which of the following housing recommendations would be most appropriate for them?

The largest single investment you will undertake in your lifetime will probably be the purchase of an automobile.

The following is/are major source(s)of home mortgages:

Adjustable-rate mortgages with monthly payment caps can lead to negative amortization.

If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 90 percent,then the borrower must make

Adjustable-rate mortgages with interest rate caps can lead to negative amortization.

and are often paid as part of one's house payment and held in an escrow account.

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

Which of the following is true regarding auto loans?

____ is an up-front,one-time cost of home ownership.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -A lender gives you a choice of an 80% loan-to-value ratio or a 90% loan-to-value ratio.The interest rate for the 80% loan-to-value ratio loan will typically be [higher | lower] than the 90%.

The monthly interest on your mortgage was $690; you paid $650.The result is

Leasing accounts for about ____ percent of all vehicles sold today.

A financial advantage of renting compared to purchasing housing is

____ is an ongoing cost of home ownership.

One would be more likely to pay discount points if she expected

Kurt has $4,500 for a down payment and thinks she can afford monthly payments of $300.If he can finance a vehicle with a 7%,4-year loan,what is the maximum amount Kurt can afford to spend on the car?

Negative amortization is possible with a fixed-rate mortgage.

If a buyer withdraws from a transaction without a valid reason after signing a sales contract,he typically loses his earnest money.

To make a legally binding offer on a car,you must sign a sales contract that specifies the offering price and all the conditions of your offer.

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

Phil and Christina are recently married and are unsure of where they will be relocated after Christina finishes her residency in 9 months.Based on this information,which of the following housing recommendations would be most appropriate for them?

The largest single investment you will undertake in your lifetime will probably be the purchase of an automobile.

The following is/are major source(s)of home mortgages:

Adjustable-rate mortgages with monthly payment caps can lead to negative amortization.

If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 90 percent,then the borrower must make

Adjustable-rate mortgages with interest rate caps can lead to negative amortization.

____ and ____ are often paid as part of one's house payment and held in an escrow account.

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

and are often paid as part of one's house payment and held in an escrow account.