Question 1

Which of the following methods of calculating interest is the most expensive?

Accepted Answer

A) Annual percentage rate or APR 
B) Simple interest 
C) Add-on interest 
D) Sum of the digits 
A) Annual percentage rate or APR 
B) Simple interest 
C) Add-on interest 
D) Sum of the digits

Question 2

There are set limits on how much a student can borrow each year for student loans,but these limits usually increase each year as the student progresses.

Accepted Answer

A) True 
 B)False

Question 3

Buying a car from a dealer with a set price (a no haggle dealer)is usually more stress-free and less time consuming.

Accepted Answer

A) True 
 B)False

Question 4

Even an unsecured personal loan should be backed by collateral.

Accepted Answer

A) True 
 B)False

Question 5

The proceeds from a home equity loan can be used for any purpose including a vacation,tuition payments,or health care expenses.

Accepted Answer

A) True 
 B)False

Question 6

Collateral

Accepted Answer

A) gives the lender additional recourse if the payments are not made. 
B) is used on unsecured loans. 
C) increases the interest rate on loans. 
D) is required on all loans. 
A) gives the lender additional recourse if the payments are not made. 
B) is used on unsecured loans. 
C) increases the interest rate on loans. 
D) is required on all loans.

Question 7

If the lender has the right to take certain specified assets of the borrower in the event of a default on the loan,the loan is a(n)________ loan.

Accepted Answer

The answer of If the lender has the right to...

Question 8

The decision to purchase versus lease a car is highly dependent on the estimated market value of the car at the end of the lease period.

Accepted Answer

A) True 
 B)False

Question 9

All of the following are true regarding a cosigner on an account except

Accepted Answer

A) the cosigner is responsible for any unpaid balance. 
B) the lender may not seize the assets of a cosigner. 
C) cosigning an account is a big liability and should be taken seriously. 
D) cosigning on a loan can restrict the amount that the cosigner is able to borrow. 
A) the cosigner is responsible for any unpaid balance. 
B) the lender may not seize the assets of a cosigner. 
C) cosigning an account is a big liability and should be taken seriously. 
D) cosigning on a loan can restrict the amount that the cosigner is able to borrow.

Question 10

What would be the total cost of leasing a vehicle for four (4)years that requires a security deposit of $1,000 (which would be withdrawn from your portfolio,which earns 9 percent per year),has monthly lease payments of $500,and has a mileage restriction of 20,000 with excess mileage resulting in a 10 cents per mile charge.Assume over the life of the lease you exceed the mileage limitations by a total of 8,000 miles.
(a)$24,000
(b)$24,360
(c)$24,800
(d)$25,160

Accepted Answer

The answer of What would be the total cost of...

Question 11

The Truth-in-Lending Act (1969)requires which of the following?

Accepted Answer

A) Adherence to the interest rates established by the Federal Reserve 
B) Specifying a standard loan rate 
C) Disclosure of only interest charges but no other fee 
D) All of the above 
A) Adherence to the interest rates established by the Federal Reserve 
B) Specifying a standard loan rate 
C) Disclosure of only interest charges but no other fee 
D) All of the above

Question 12

Having a longer term loan

Accepted Answer

A) costs you more interest and therefore increases the cost of your loan. 
B) makes your monthly payments larger. 
C) is almost always the best alternative for credit users. 
D) gives you access to additional sources of financing. 
A) costs you more interest and therefore increases the cost of your loan. 
B) makes your monthly payments larger. 
C) is almost always the best alternative for credit users. 
D) gives you access to additional sources of financing.

Question 13

The most favorable car financing is that of

Accepted Answer

A) commercial banks. 
B) credit unions. 
C) car dealers. 
D) There is no one best deal every time; it pays to shop around. 
A) commercial banks. 
B) credit unions. 
C) car dealers. 
D) There is no one best deal every time; it pays to shop around.

Question 14

Which kind of loan generally has the lowest interest rate charged?

Accepted Answer

A) Unsecured loan 
B) Secured loan 
C) Cash advance 
D) Vacation loan 
A) Unsecured loan 
B) Secured loan 
C) Cash advance 
D) Vacation loan

Question 15

The more expensive the car,the ________ the payments,and the ________ you can put away in other investments.

Accepted Answer

A) higher; more 
B) higher; less 
C) lower; less 
D) lower; more 
A) higher; more 
B) higher; less 
C) lower; less 
D) lower; more

Question 16

The monthly payment for a loan is dependent only on the size of the loan and the interest rate.

Accepted Answer

A) True 
 B)False

Question 17

The ________ the maturity of a loan,the ________ the payments.

Accepted Answer

A) longer; smaller 
B) shorter; larger 
C) Both A and B 
D) shorter; smaller 
A) longer; smaller 
B) shorter; larger 
C) Both A and B 
D) shorter; smaller

Question 18

Purchasing a car is a big decision.Therefore you should not

Accepted Answer

A) use the Internet to price shop. 
B) read Consumer Reports to find a good car value. 
C) ask a friend or relative to go with you to the car lot. 
D) rely on the dealer personnel as the best source of expert advice. 
A) use the Internet to price shop. 
B) read Consumer Reports to find a good car value. 
C) ask a friend or relative to go with you to the car lot. 
D) rely on the dealer personnel as the best source of expert advice.

Question 19

The most common source of financing is a personal loan from a financial institution.

Accepted Answer

A) True 
 B)False

Question 20

If you are considering trading in a used car on your new one,it is best to

Accepted Answer

A) tell the dealer right away so he can figure your trade-in credit against the purchase of your new car. 
B) not trade the car in,but rather sell it yourself to someone else. 
C) make the trade-in deal a separate transaction for the new car deal. 
D) not be too concerned about the value given,since dealers are required to give you at least blue book value. 
A) tell the dealer right away so he can figure your trade-in credit against the purchase of your new car. 
B) not trade the car in,but rather sell it yourself to someone else. 
C) make the trade-in deal a separate transaction for the new car deal. 
D) not be too concerned about the value given,since dealers are required to give you at least blue book value.

Which of the following methods of calculating interest is the most expensive?

There are set limits on how much a student can borrow each year for student loans,but these limits usually increase each year as the student progresses.

Buying a car from a dealer with a set price (a no haggle dealer)is usually more stress-free and less time consuming.

Even an unsecured personal loan should be backed by collateral.

The proceeds from a home equity loan can be used for any purpose including a vacation,tuition payments,or health care expenses.

Collateral

If the lender has the right to take certain specified assets of the borrower in the event of a default on the loan,the loan is a(n)________ loan.

The decision to purchase versus lease a car is highly dependent on the estimated market value of the car at the end of the lease period.

All of the following are true regarding a cosigner on an account except

The Truth-in-Lending Act (1969)requires which of the following?

Having a longer term loan

The most favorable car financing is that of

Which kind of loan generally has the lowest interest rate charged?

The more expensive the car,the the payments,and the you can put away in other investments.

The monthly payment for a loan is dependent only on the size of the loan and the interest rate.

The the maturity of a loan,the the payments.

Purchasing a car is a big decision.Therefore you should not

The most common source of financing is a personal loan from a financial institution.

If you are considering trading in a used car on your new one,it is best to

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

Exam 9: Personal Loans

Which of the following methods of calculating interest is the most expensive?

There are set limits on how much a student can borrow each year for student loans,but these limits usually increase each year as the student progresses.

Buying a car from a dealer with a set price (a no haggle dealer)is usually more stress-free and less time consuming.

Even an unsecured personal loan should be backed by collateral.

The proceeds from a home equity loan can be used for any purpose including a vacation,tuition payments,or health care expenses.

Collateral

If the lender has the right to take certain specified assets of the borrower in the event of a default on the loan,the loan is a(n)________ loan.

The decision to purchase versus lease a car is highly dependent on the estimated market value of the car at the end of the lease period.

All of the following are true regarding a cosigner on an account except

The Truth-in-Lending Act (1969)requires which of the following?

Having a longer term loan

The most favorable car financing is that of

Which kind of loan generally has the lowest interest rate charged?

The more expensive the car,the ________ the payments,and the ________ you can put away in other investments.

The monthly payment for a loan is dependent only on the size of the loan and the interest rate.

The ________ the maturity of a loan,the ________ the payments.

Purchasing a car is a big decision.Therefore you should not

The most common source of financing is a personal loan from a financial institution.

If you are considering trading in a used car on your new one,it is best to

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

The more expensive the car,the the payments,and the you can put away in other investments.

The the maturity of a loan,the the payments.