Question 1

Use the following two columns of items to answer the matching questions below:
-loan application

Accepted Answer

A) a contract that specifies the terms of the loan agreed to by the borrower and lender 
B) disclosure of information including a balance sheet and cash flow statement 
C) life or duration of a loan 
D) loan that is not backed by collateral 
A) a contract that specifies the terms of the loan agreed to by the borrower and lender 
B) disclosure of information including a balance sheet and cash flow statement 
C) life or duration of a loan 
D) loan that is not backed by collateral

Question 2

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 3

When considering how much money to spend on the purchase of a new car,you must consider how your choices affect your spending on other needs.The ________ solution limits your credit card purchases to what you can afford to pay off when your credit card bill arrives each month.

Accepted Answer

A)  maximum debt 
B)  limited debt 
C)  no debt 
D)  minimum debt 
A)  maximum debt 
B)  limited debt 
C)  no debt 
D)  minimum debt

Question 4

Personal loans include which of the following?

Accepted Answer

A)  Car loans 
B)  Credit card advance payments 
C)  Home equity loans 
D)  Both A and C are correct 
A)  Car loans 
B)  Credit card advance payments 
C)  Home equity loans 
D)  Both A and C are correct

Question 5

In which of the following scenarios would you favor leasing over purchasing a car?

Accepted Answer

A)  The number of miles that you drive each year varies significantly and is hard to predict. 
B)  Repair expenses on the car are very low. 
C)  The car in question is one whose value depreciates rapidly. 
D)  All of the above 
A)  The number of miles that you drive each year varies significantly and is hard to predict. 
B)  Repair expenses on the car are very low. 
C)  The car in question is one whose value depreciates rapidly. 
D)  All of the above

Question 6

A loan based on the difference between the appraised value of your house and the balance due on your mortgage is called a(n)________ loan.

Accepted Answer

The answer of A loan based on the difference between...

Question 7

What should you not consider when selecting a vehicle?

Accepted Answer

A)  Personal preferences 
B)  Insurance costs 
C)  All parts are American-made 
D)  Resale value 
A)  Personal preferences 
B)  Insurance costs 
C)  All parts are American-made 
D)  Resale value

Question 8

Even though you don't use the proceeds to improve your home,the interest on a home equity loan is deductible for federal income tax purposes.

Accepted Answer

A) True 
 B)False

Question 9

Auto loan Internet sites are a good source to estimate the maximum amount you can borrow,based on financial information you provide.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following are important factors in determining the monthly lease price of an new car?

Accepted Answer

A)  Purchase price or capitalized value 
B)  "Money factor" or interest rate embedded in the lease 
C)  Residual value of the car included in the lease contract 
D)  A, B and C are all key factors in determining the monthly lease payment 
A)  Purchase price or capitalized value 
B)  "Money factor" or interest rate embedded in the lease 
C)  Residual value of the car included in the lease contract 
D)  A, B and C are all key factors in determining the monthly lease payment

Question 11

List the advantages and disadvantages of paying for your education with student loans.

Accepted Answer

Advantages-pay later with no interest in

Question 12

It is usually better to lease a vehicle than buy one,since you are not responsible for the repairs or maintenance on a leased car.

Accepted Answer

A) True 
 B)False

Question 13

In the past you have purchased cars that you have driven for 10 years or more.The mileage on these vehicles usually exceeded 100,000 and therefore you would just give them to a younger family member.Based on this history,your primary financial consideration in selecting a car will be

Accepted Answer

A)  resale value. 
B)  financing rate. 
C)  repair expense. 
D)  personal preference. 
A)  resale value. 
B)  financing rate. 
C)  repair expense. 
D)  personal preference.

Question 14

Which is true regarding resale value of cars?

Accepted Answer

A)  You can't really determine the resale value very accurately before you buy a car. 
B)  You are always better off to buy a higher priced car with a greater resale value. 
C)  You are always better off to buy a lower priced car with a lower resale value. 
D)  Resale values can be determined from the Internet and other sources and should be a consideration in buying a car. 
A)  You can't really determine the resale value very accurately before you buy a car. 
B)  You are always better off to buy a higher priced car with a greater resale value. 
C)  You are always better off to buy a lower priced car with a lower resale value. 
D)  Resale values can be determined from the Internet and other sources and should be a consideration in buying a car.

Question 15

Collateral is defined as assets of the lender that back a secured loan in the event of default.

Accepted Answer

A) True 
 B)False

Question 16

Leasing a car is a good option if you drive many miles a year.

Accepted Answer

A) True 
 B)False

Question 17

When negotiating the price of any car,which of the following statements is true?

Accepted Answer

A)  The car dealer earns a small profit if the customer doesn't negotiate and pays full price. 
B)  Dealers that negotiate will purposely price cars below the price for which they are willing to sell the car. 
C)  Sales people are trained to act as if they are giving the car away. 
D)  Salespeople are uncertain of the price at which they can sell you the car until you begin negotiations. 
A)  The car dealer earns a small profit if the customer doesn't negotiate and pays full price. 
B)  Dealers that negotiate will purposely price cars below the price for which they are willing to sell the car. 
C)  Sales people are trained to act as if they are giving the car away. 
D)  Salespeople are uncertain of the price at which they can sell you the car until you begin negotiations.

Question 18

Advantages to leasing a car instead of buying one are that you need less of a down payment and that you do not need to worry about finding a buyer for your car when the lease is over.

Accepted Answer

A) True 
 B)False

Question 19

The cost of leasing a car versus purchasing one

Accepted Answer

A)  is more. 
B)  is less. 
C)  is about the same. 
D)  varies depending on a multitude of factors. 
A)  is more. 
B)  is less. 
C)  is about the same. 
D)  varies depending on a multitude of factors.

Question 20

________ is a method of computing interest based on the existing principal amount of the loan.

Accepted Answer

The answer of ________ is a method of computing interest...

Exam 9: Personal Loans

Use the following two columns of items to answer the matching questions below: -loan application

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

When considering how much money to spend on the purchase of a new car,you must consider how your choices affect your spending on other needs.The ________ solution limits your credit card purchases to what you can afford to pay off when your credit card bill arrives each month.

Personal loans include which of the following?

In which of the following scenarios would you favor leasing over purchasing a car?

A loan based on the difference between the appraised value of your house and the balance due on your mortgage is called a(n)________ loan.

What should you not consider when selecting a vehicle?

Even though you don't use the proceeds to improve your home,the interest on a home equity loan is deductible for federal income tax purposes.

Auto loan Internet sites are a good source to estimate the maximum amount you can borrow,based on financial information you provide.

Which of the following are important factors in determining the monthly lease price of an new car?

List the advantages and disadvantages of paying for your education with student loans.

It is usually better to lease a vehicle than buy one,since you are not responsible for the repairs or maintenance on a leased car.

In the past you have purchased cars that you have driven for 10 years or more.The mileage on these vehicles usually exceeded 100,000 and therefore you would just give them to a younger family member.Based on this history,your primary financial consideration in selecting a car will be

Which is true regarding resale value of cars?

Collateral is defined as assets of the lender that back a secured loan in the event of default.

Leasing a car is a good option if you drive many miles a year.

When negotiating the price of any car,which of the following statements is true?

Advantages to leasing a car instead of buying one are that you need less of a down payment and that you do not need to worry about finding a buyer for your car when the lease is over.

The cost of leasing a car versus purchasing one

________ is a method of computing interest based on the existing principal amount of the loan.

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

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