Question 1

Regarding automobile insurance,

Accepted Answer

A)  the best time to shop for rates is while you are at the car dealership. 
B)  most cars cost the same to insure if the driver is the same. 
C)  it is better to compare costs before you commit to buying a particular car. 
D)  you can lower your costs by buying a more expensive car that is less likely to have accidents. 
A)  the best time to shop for rates is while you are at the car dealership. 
B)  most cars cost the same to insure if the driver is the same. 
C)  it is better to compare costs before you commit to buying a particular car. 
D)  you can lower your costs by buying a more expensive car that is less likely to have accidents.

Question 2

You obtain a loan of $3,000 to be repaid over one year.Assume you are charged 12% interest based on the add-on method.You monthly payments would be

Accepted Answer

A)  $280. 
B)  $300. 
C)  $360. 
D)  $270. 
A)  $280. 
B)  $300. 
C)  $360. 
D)  $270.

Question 3

Even an unsecured personal loan should be backed by collateral.

Accepted Answer

A) True 
 B)False

Question 4

When the borrower and the lender have agreed to the specific terms of the loan these will be included in the ________.

Accepted Answer

The answer of When the borrower and the lender have...

Question 5

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 6

If a loan is cosigned and the borrower defaults,the lender has the right to sue the cosigner or try to seize the cosigner's assets just as if that person were the borrower.

Accepted Answer

A) True 
 B)False

Question 7

All of the following are true of peer-to-peer lending,except

Accepted Answer

A)  it involves online platforms. 
B)  borrowers generally have high FICO scores. 
C)  loans are available only for amounts less than $1,000. 
D)  interest rates may be lower than at financial institution. 
A)  it involves online platforms. 
B)  borrowers generally have high FICO scores. 
C)  loans are available only for amounts less than $1,000. 
D)  interest rates may be lower than at financial institution.

Question 8

What would be the total cost of leasing a vehicle for four years that requires a security deposit of $1,000 (which would be withdrawn from your portfolio,which earns 9% per year),has monthly lease payments of $500,and has a mileage restriction of 20,000 with excess mileage resulting in a 10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 that over the life of the lease you exceed the mileage limitations by a total of 8,000 miles.

Accepted Answer

A)  $24,000 
B)  $24,360 
C)  $24,800 
D)  $25,160 
A)  $24,000 
B)  $24,360 
C)  $24,800 
D)  $25,160

Question 9

If you agree to allow the lender to take your computer in the event you fail to make payments,the loan is which of the following?

Accepted Answer

A)  Amortized 
B)  Unsecured 
C)  Secured 
D)  Interest free 
A)  Amortized 
B)  Unsecured 
C)  Secured 
D)  Interest free

Question 10

Longer maturities for loans result in lower monthly payments and therefore make it easier to cover payments each month.

Accepted Answer

A) True 
 B)False

Question 11

Which kind of loan generally charges the lowest interest rate?

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 12

Lucky Louie applied for a $5,000 loan payable in one year and was provided the following data; interest due at payoff of $750,application fee $100,credit check $75,processing fee $75.What is the APR of Louie's loan?

Accepted Answer

A)  20% 
B)  17.5% 
C)  22.5% 
D)  There is not enough information to determine the answer. 
A)  20% 
B)  17.5% 
C)  22.5% 
D)  There is not enough information to determine the answer.

Question 13

Home equity is defined as the market value of the home less the debt owed on the home.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) assets of a borrower that back a secured loan 
B) interest rate multiplied by the principal 
C) rate that measures the finance expenses 
A) assets of a borrower that back a secured loan 
B) interest rate multiplied by the principal 
C) rate that measures the finance expenses

Question 15

Disadvantages of leasing a vehicle include all of the following except

Accepted Answer

A)  no equity in the car. 
B)  cost of finding a buyer for the car at the termination of the lease. 
C)  responsibility for maintenance costs. 
D)  additional charges beyond the monthly lease payments. 
A)  no equity in the car. 
B)  cost of finding a buyer for the car at the termination of the lease. 
C)  responsibility for maintenance costs. 
D)  additional charges beyond the monthly lease payments.

Question 16

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 17

Regarding the amount of money borrowed on a loan,all of the following are true except

Accepted Answer

A)  the amount is based on how much the lender believes you can pay back in the future. 
B)  you should borrow slightly more than you need to cover future inflation. 
C)  you should only borrow the amount you need. 
D)  you will have to pay interest on the entire amount. 
A)  the amount is based on how much the lender believes you can pay back in the future. 
B)  you should borrow slightly more than you need to cover future inflation. 
C)  you should only borrow the amount you need. 
D)  you will have to pay interest on the entire amount.

Question 18

Making extra payments on a loan does all of the following except

Accepted Answer

A)  reduces the total amount of interest paid. 
B)  gives you extra income for living expenses. 
C)  reduces the maturity of the loan. 
D)  helps assure your good credit rating. 
A)  reduces the total amount of interest paid. 
B)  gives you extra income for living expenses. 
C)  reduces the maturity of the loan. 
D)  helps assure your good credit rating.

Question 19

In determining the amount of your loan,you should ask for about 20% more than you need in order to give yourself financial flexibility in the future.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements about student loans is not true?

Accepted Answer

A)  If you don't complete your education, you will not have to pay back your student loan. 
B)  A school's financial aid office is a good source of information on student loans. 
C)  Both the federal government and financial institutions participate in the student loan program. 
D)  Interest is often deferred and there can be tax savings on the interest paid on student loans. 
A)  If you don't complete your education, you will not have to pay back your student loan. 
B)  A school's financial aid office is a good source of information on student loans. 
C)  Both the federal government and financial institutions participate in the student loan program. 
D)  Interest is often deferred and there can be tax savings on the interest paid on student loans.

Regarding automobile insurance,

You obtain a loan of $3,000 to be repaid over one year.Assume you are charged 12% interest based on the add-on method.You monthly payments would be

Even an unsecured personal loan should be backed by collateral.

When the borrower and the lender have agreed to the specific terms of the loan these will be included in the ________.

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.

If a loan is cosigned and the borrower defaults,the lender has the right to sue the cosigner or try to seize the cosigner's assets just as if that person were the borrower.

All of the following are true of peer-to-peer lending,except

If you agree to allow the lender to take your computer in the event you fail to make payments,the loan is which of the following?

Longer maturities for loans result in lower monthly payments and therefore make it easier to cover payments each month.

Which kind of loan generally charges the lowest interest rate?

Lucky Louie applied for a $5,000 loan payable in one year and was provided the following data; interest due at payoff of $750,application fee $100,credit check $75,processing fee $75.What is the APR of Louie's loan?

Home equity is defined as the market value of the home less the debt owed on the home.

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

Disadvantages of leasing a vehicle include all of the following except

The most favorable car financing is that of

Regarding the amount of money borrowed on a loan,all of the following are true except

Making extra payments on a loan does all of the following except

In determining the amount of your loan,you should ask for about 20% more than you need in order to give yourself financial flexibility in the future.

Which of the following statements about student loans is not true?

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

Regarding automobile insurance,

You obtain a loan of $3,000 to be repaid over one year.Assume you are charged 12% interest based on the add-on method.You monthly payments would be

Even an unsecured personal loan should be backed by collateral.

When the borrower and the lender have agreed to the specific terms of the loan these will be included in the ________.

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.

If a loan is cosigned and the borrower defaults,the lender has the right to sue the cosigner or try to seize the cosigner's assets just as if that person were the borrower.

All of the following are true of peer-to-peer lending,except

If you agree to allow the lender to take your computer in the event you fail to make payments,the loan is which of the following?

Longer maturities for loans result in lower monthly payments and therefore make it easier to cover payments each month.

Which kind of loan generally charges the lowest interest rate?

Lucky Louie applied for a $5,000 loan payable in one year and was provided the following data; interest due at payoff of $750,application fee $100,credit check $75,processing fee $75.What is the APR of Louie's loan?

Home equity is defined as the market value of the home less the debt owed on the home.

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

Disadvantages of leasing a vehicle include all of the following except

The most favorable car financing is that of

Regarding the amount of money borrowed on a loan,all of the following are true except

Making extra payments on a loan does all of the following except

In determining the amount of your loan,you should ask for about 20% more than you need in order to give yourself financial flexibility in the future.

Which of the following statements about student loans is not true?

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