Question 1

How do you know how much debt you can comfortably afford?

Accepted Answer

By applying the debt limit ratio you can

Question 2

Defaulting on a secured loan may lead to the collateral being repossessed.

Accepted Answer

A) True 
 B)False

Question 3

Describe the four types of student-loan repayment plans.

Accepted Answer

Standard repayment (10-year term;you pay

Question 4

When do the payments on a Stafford Loan begin?

Accepted Answer

A) When your school receives the money from the government 
B) When your loan balance gets over $5,000 
C) You can choose when your payments begin anytime within 24 months of your graduation date. 
D) None of the above is correct. 
A) When your school receives the money from the government 
B) When your loan balance gets over $5,000 
C) You can choose when your payments begin anytime within 24 months of your graduation date. 
D) None of the above is correct.

Question 5

Home equity/second mortgage loans have two important advantages over most other types of loans.They are

Accepted Answer

A) tax deductibility of payments and longer terms. 
B) tax deductibility of interest and lower interest rates. 
C) no risk for borrower and less amortization. 
D) increase in future financing flexibility and no recourse clause. 
E) none of the above. 
A) tax deductibility of payments and longer terms. 
B) tax deductibility of interest and lower interest rates. 
C) no risk for borrower and less amortization. 
D) increase in future financing flexibility and no recourse clause. 
E) none of the above.

Question 6

Suppose you borrowed the money you needed to purchase an automobile and then failed to make a scheduled payment by the due date.Technically,you

Accepted Answer

A) are bankrupt. 
B) are in default. 
C) are usually not given a chance to make good on the overdue payment. 
D) none of the above 
A) are bankrupt. 
B) are in default. 
C) are usually not given a chance to make good on the overdue payment. 
D) none of the above

Question 7

The APR is larger when money is lent under the discount method than when it is lent under the simple interest method.

Accepted Answer

A) True 
 B)False

Question 8

The loan contract is a formal document called a(n)________ and may contain a(n)________ specifying who retains control over the item being purchased in the case of default.

Accepted Answer

A) agreement;insurance clause 
B) indenture;security agreement 
C) note;security agreement 
D) agreement;indenture 
E) note;legal transaction 
A) agreement;insurance clause 
B) indenture;security agreement 
C) note;security agreement 
D) agreement;indenture 
E) note;legal transaction

Question 9

Neal's life insurance policy has a cash value of $100,000.He wants to purchase a second home to rent out.How much can Neal borrow against the surrender value of his life insurance policy?

Accepted Answer

A) $50,000 
B) $75,000 
C) $95,000 
D) $100,000 
A) $50,000 
B) $75,000 
C) $95,000 
D) $100,000

Question 10

Joshua recently purchased a new home.His lender required him to purchase credit life insurance on the loan in the event that he died before the mortgage is paid off.What is the loan clause that allows his lender to require him to purchase this additional insurance?

Accepted Answer

A) Insurance agreement clause 
B) Default contingency clause 
C) Early payment clause 
D) Recourse clause 
E) None of the above 
A) Insurance agreement clause 
B) Default contingency clause 
C) Early payment clause 
D) Recourse clause 
E) None of the above

Question 11

Student who are awarded grants must pay back a percentage of the amount after graduation.

Accepted Answer

A) True 
 B)False

Question 12

The interest that you pay on your student loans will lower your taxable income if you meet IRS guidelines.

Accepted Answer

A) True 
 B)False

Question 13

Payday lenders

Accepted Answer

A) make money by providing one-time assistance during a time of financial need. 
B) make money by keeping borrowers in debt. 
C) encourage repeat borrowing. 
D) all of the above. 
A) make money by providing one-time assistance during a time of financial need. 
B) make money by keeping borrowers in debt. 
C) encourage repeat borrowing. 
D) all of the above.

Question 14

Name two tax credits available to help offset education costs.

Accepted Answer

American Opportunity Credit: a

Question 15

An example of a consumer loan is a(n)

Accepted Answer

A) unsecured loan. 
B) pre-payment loan. 
C) interim loan. 
D) both A and C. 
A) unsecured loan. 
B) pre-payment loan. 
C) interim loan. 
D) both A and C.

Question 16

The ________ is the automatic repayment plan with a 10-year term.

Accepted Answer

A) extended repayment 
B) standard repayment 
C) income-based repayment 
D) graduated repayment 
A) extended repayment 
B) standard repayment 
C) income-based repayment 
D) graduated repayment

Question 17

Explain the purpose of a convertible loan.

Accepted Answer

A convertible loan has the potential of

Question 18

Consumer loans can range from unsecured,fixed-rate,single-payment loans to secured,variable-rate,installment loans.

Accepted Answer

A) True 
 B)False

Question 19

Debt consolidation loans can be a very good thing for some people but they can also be dangerous to some.Explain the benefits and dangers of a debt consolidation loan.

Accepted Answer

If you are fortunate enough to have suff

Question 20

Name the advantages and disadvantages of an unsecured loan.

Accepted Answer

Unsecured loans require no collateral,on

How do you know how much debt you can comfortably afford?

Defaulting on a secured loan may lead to the collateral being repossessed.

Describe the four types of student-loan repayment plans.

When do the payments on a Stafford Loan begin?

Home equity/second mortgage loans have two important advantages over most other types of loans.They are

Suppose you borrowed the money you needed to purchase an automobile and then failed to make a scheduled payment by the due date.Technically,you

The APR is larger when money is lent under the discount method than when it is lent under the simple interest method.

The loan contract is a formal document called a(n) and may contain a(n) specifying who retains control over the item being purchased in the case of default.

Neal's life insurance policy has a cash value of $100,000.He wants to purchase a second home to rent out.How much can Neal borrow against the surrender value of his life insurance policy?

Joshua recently purchased a new home.His lender required him to purchase credit life insurance on the loan in the event that he died before the mortgage is paid off.What is the loan clause that allows his lender to require him to purchase this additional insurance?

Student who are awarded grants must pay back a percentage of the amount after graduation.

The interest that you pay on your student loans will lower your taxable income if you meet IRS guidelines.

Payday lenders

Name two tax credits available to help offset education costs.

An example of a consumer loan is a(n)

The ________ is the automatic repayment plan with a 10-year term.

Explain the purpose of a convertible loan.

Consumer loans can range from unsecured,fixed-rate,single-payment loans to secured,variable-rate,installment loans.

Debt consolidation loans can be a very good thing for some people but they can also be dangerous to some.Explain the benefits and dangers of a debt consolidation loan.

Name the advantages and disadvantages of an unsecured loan.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Exam 7: Student and Consumer Loans: the Role of Planned Borrowing

How do you know how much debt you can comfortably afford?

Defaulting on a secured loan may lead to the collateral being repossessed.

Describe the four types of student-loan repayment plans.

When do the payments on a Stafford Loan begin?

Home equity/second mortgage loans have two important advantages over most other types of loans.They are

Suppose you borrowed the money you needed to purchase an automobile and then failed to make a scheduled payment by the due date.Technically,you

The APR is larger when money is lent under the discount method than when it is lent under the simple interest method.

The loan contract is a formal document called a(n)________ and may contain a(n)________ specifying who retains control over the item being purchased in the case of default.

Neal's life insurance policy has a cash value of $100,000.He wants to purchase a second home to rent out.How much can Neal borrow against the surrender value of his life insurance policy?

Joshua recently purchased a new home.His lender required him to purchase credit life insurance on the loan in the event that he died before the mortgage is paid off.What is the loan clause that allows his lender to require him to purchase this additional insurance?

Student who are awarded grants must pay back a percentage of the amount after graduation.

The interest that you pay on your student loans will lower your taxable income if you meet IRS guidelines.

Payday lenders

Name two tax credits available to help offset education costs.

An example of a consumer loan is a(n)

The ________ is the automatic repayment plan with a 10-year term.

Explain the purpose of a convertible loan.

Consumer loans can range from unsecured,fixed-rate,single-payment loans to secured,variable-rate,installment loans.

Debt consolidation loans can be a very good thing for some people but they can also be dangerous to some.Explain the benefits and dangers of a debt consolidation loan.

Name the advantages and disadvantages of an unsecured loan.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

The loan contract is a formal document called a(n) and may contain a(n) specifying who retains control over the item being purchased in the case of default.