Question 1

Points paid when a home is refinanced can all be deducted as interest in the year they are paid.

Accepted Answer

A) True 
 B)False

Question 2

The price of the car you are leasing is called the:

Accepted Answer

A)  money factor. 
B)  capitalized cost. 
C)  residual value. 
D)  purchase option. 
E)  capitalized cost reduction. 
A)  money factor. 
B)  capitalized cost. 
C)  residual value. 
D)  purchase option. 
E)  capitalized cost reduction.

Question 3

In which of the following situations would you have to pay additional money when returning a vehicle using an open-end lease?

Accepted Answer

A)  When the residual value is less than expected 
B)  When the residual value is more than expected 
C)  mileage limits are not exceeded 
D)  a and c 
E)  b and c 
A)  When the residual value is less than expected 
B)  When the residual value is more than expected 
C)  mileage limits are not exceeded 
D)  a and c 
E)  b and c

Question 4

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-The interest rate on an adjustable-rate mortgages can be increased [automatically every year | only when a designated index increases].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 5

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 6

Which of the following is an advantage of buying a used car rather than a new car?

Accepted Answer

A)  It will be in a good mechanical condition. 
B)  It will depreciate more quickly. 
C)  It will have more choices available. 
D)  It will be less expensive. 
E)  all of the above 
A)  It will be in a good mechanical condition. 
B)  It will depreciate more quickly. 
C)  It will have more choices available. 
D)  It will be less expensive. 
E)  all of the above

Question 7

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-[Depreciation | Amortization] is a loss in the value of an asset such as an automobile that occurs over its period of ownership.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 8

The interest rate charged on adjustable-rate mortgages will change from time to time based on a specified index.

Accepted Answer

A) True 
 B)False

Question 9

The monthly mortgage payment divided by your monthly gross income equals an affordability ratio.

Accepted Answer

A) True 
 B)False

Question 10

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-As home prices have fallen the "rent ratio" has [increased | decreased].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 11

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-If your lender charges 1 1/2 mortgage points on a house selling for $100,000 on which there is a $90,000 loan,the points will cost you [$1,350 | $1,500].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 12

If after signing a sales contract,you withdraw from a transaction without a valid reason,you might have to forfeit the earnest money deposit.

Accepted Answer

A) True 
 B)False

Question 13

According to federal law,private mortgage insurance on most loans made on or after July 29,1999,ends automatically once the mortgage is paid down to 80% of the original value of the house.

Accepted Answer

A) True 
 B)False

Question 14

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-With most adjustable-rate mortgages,the interest rate over the lifetime of the loan can [increase to any level | increase only up to the pre-stated maximum].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 15

Jackie is in the 28% marginal tax bracket and has no other itemized deductions except those related to her home.If her standard deduction is $6,100 and she incurs the following costs related to housing,how much tax savings will she receive as a result of her home purchase?

Accepted Answer

A)  $13,250 
B)  $ 5,040 
C)  $ 3,332 
D)  $ 2,800 
E)  none 
A)  $13,250 
B)  $ 5,040 
C)  $ 3,332 
D)  $ 2,800 
E)  none

Question 16

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-Terminating a lease early is typically [difficult | easy].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 17

Billy and Suzie want to calculate the difference in monthly payments on a $110,000 home as a result of a $5,000 down payment or a $10,000 down payment.Use your financial calculator to figure the monthly payments,assuming they get a 6.5%,30-year mortgage.

Accepted Answer

$ 5,000 down payment: PV = $10

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-There is direct ownership of your living space in a [condo | co-op apartment].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 20

Janice wants to buy a new car.The cost is $30,000.At the end of six years,the car is expected to be worth 20% of the original price.
a.
What will the car value be in six years?
b.
What is the annual depreciation on the car?

Accepted Answer

The answer of Janice wants to buy a new car.The...

Points paid when a home is refinanced can all be deducted as interest in the year they are paid.

The price of the car you are leasing is called the:

In which of the following situations would you have to pay additional money when returning a vehicle using an open-end lease?

Which of the following is an advantage of buying a used car rather than a new car?

The interest rate charged on adjustable-rate mortgages will change from time to time based on a specified index.

The monthly mortgage payment divided by your monthly gross income equals an affordability ratio.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -As home prices have fallen the "rent ratio" has [increased | decreased].

If after signing a sales contract,you withdraw from a transaction without a valid reason,you might have to forfeit the earnest money deposit.

According to federal law,private mortgage insurance on most loans made on or after July 29,1999,ends automatically once the mortgage is paid down to 80% of the original value of the house.

Jackie is in the 28% marginal tax bracket and has no other itemized deductions except those related to her home.If her standard deduction is $6,100 and she incurs the following costs related to housing,how much tax savings will she receive as a result of her home purchase?

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -Terminating a lease early is typically [difficult | easy].

Billy and Suzie want to calculate the difference in monthly payments on a $110,000 home as a result of a $5,000 down payment or a $10,000 down payment.Use your financial calculator to figure the monthly payments,assuming they get a 6.5%,30-year mortgage.

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

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -There is direct ownership of your living space in a [condo | co-op apartment].

Janice wants to buy a new car.The cost is $30,000.At the end of six years,the car is expected to be worth 20% of the original price. a. What will the car value be in six years? b. What is the annual depreciation on the car?

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

Points paid when a home is refinanced can all be deducted as interest in the year they are paid.

The price of the car you are leasing is called the:

In which of the following situations would you have to pay additional money when returning a vehicle using an open-end lease?

Which of the following is an advantage of buying a used car rather than a new car?

The interest rate charged on adjustable-rate mortgages will change from time to time based on a specified index.

The monthly mortgage payment divided by your monthly gross income equals an affordability ratio.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -As home prices have fallen the "rent ratio" has [increased | decreased].

If after signing a sales contract,you withdraw from a transaction without a valid reason,you might have to forfeit the earnest money deposit.

According to federal law,private mortgage insurance on most loans made on or after July 29,1999,ends automatically once the mortgage is paid down to 80% of the original value of the house.

Jackie is in the 28% marginal tax bracket and has no other itemized deductions except those related to her home.If her standard deduction is $6,100 and she incurs the following costs related to housing,how much tax savings will she receive as a result of her home purchase?

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -Terminating a lease early is typically [difficult | easy].

Billy and Suzie want to calculate the difference in monthly payments on a $110,000 home as a result of a $5,000 down payment or a $10,000 down payment.Use your financial calculator to figure the monthly payments,assuming they get a 6.5%,30-year mortgage.

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

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -There is direct ownership of your living space in a [condo | co-op apartment].

Janice wants to buy a new car.The cost is $30,000.At the end of six years,the car is expected to be worth 20% of the original price. a. What will the car value be in six years? b. What is the annual depreciation on the car?

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