Question 1

Student loans are made by banks and other financial institutions,but students apply for these loans through their universities.

Accepted Answer

A) True 
 B)False  True

Question 2

If the add-on method is used to calculate a finance charge of $150.80 on a $2,200 loan,the amount to be repaid is $2,200.

Accepted Answer

A) True 
 B)False  False

Question 3

INSTRUCTIONS: 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.
-When the interest rate on savings is higher than the interest rate on a loan,it is less expensive to [borrow | use savings] to make a purchase.

Accepted Answer

a

Question 4

INSTRUCTIONS: 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.
-Loan repayment of a [Perkins | PLUS] loan would not begin until a student is out of school.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 5

Commercial banks are generally more selective in granting loans than finance companies.

Accepted Answer

A) True 
 B)False

Question 6

Mike and Amanda have been reviewing their financial statements.Using the following information,they have asked you to determine their debt safety ratio and advise them about assuming more debt in the future.

Accepted Answer

A)  Mike and Amanda have a manageable debt ratio and can assume more debt. 
B)  Mike and Amanda have a debt ratio that is very low and can consider assuming more debt. 
C)  Mike and Amanda have a debt ratio around the danger range and should wait before assuming more debt. 
D)  Mike and Amanda have a debt ratio that is very high and should assume no more debt. 
E)  It is impossible to tell what they should do. 
A)  Mike and Amanda have a manageable debt ratio and can assume more debt. 
B)  Mike and Amanda have a debt ratio that is very low and can consider assuming more debt. 
C)  Mike and Amanda have a debt ratio around the danger range and should wait before assuming more debt. 
D)  Mike and Amanda have a debt ratio that is very high and should assume no more debt. 
E)  It is impossible to tell what they should do.

Question 7

GMAC is an example of a captive sales finance company.

Accepted Answer

A) True 
 B)False

Question 8

INSTRUCTIONS: 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 longer the loan maturity,the [lower | higher] the monthly payments will be.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 9

INSTRUCTIONS: 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.
-When interest rates are falling,you would prefer a [fixed-rate | variable-rate] loan.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 10

The majority of loans made by savings and loan associations are ____ loans.

Accepted Answer

A)  home improvement 
B)  auto 
C)  mortgage 
D)  education 
E)  consolidation 
A)  home improvement 
B)  auto 
C)  mortgage 
D)  education 
E)  consolidation

Question 11

A characteristic of consumer loans is that they

Accepted Answer

A)  include a negotiated contract. 
B)  are arrived at through a formal process. 
C)  include a repayment schedule. 
D)  are used to purchase big-ticket durable goods and other items. 
E)  are all of these. 
A)  include a negotiated contract. 
B)  are arrived at through a formal process. 
C)  include a repayment schedule. 
D)  are used to purchase big-ticket durable goods and other items. 
E)  are all of these.

Question 12

Consolidation loans are used to purchase new furniture and appliances when many items are needed at the same time.

Accepted Answer

A) True 
 B)False

Question 13

INSTRUCTIONS: 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.
-Consolidation loans are generally [inexpensive | expensive].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 14

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

Accepted Answer

A) True 
 B)False

Question 15

A note is the

Accepted Answer

A)  agreement allowing the installment lender to control the item being purchased. 
B)  promise to repay. 
C)  sales contract. 
D)  purchase agreement. 
E)  insurance agreement. 
A)  agreement allowing the installment lender to control the item being purchased. 
B)  promise to repay. 
C)  sales contract. 
D)  purchase agreement. 
E)  insurance agreement.

Question 16

Most loans made by consumer finance companies are for larger amounts and are made to low risk borrowers.

Accepted Answer

A) True 
 B)False

Question 17

Sales finance companies

Accepted Answer

A)  lend money to retailers. 
B)  buy installment loans from retailers. 
C)  sell installment loans to retailers. 
D)  lend money to consumers. 
E)  sell installment loans to banks. 
A)  lend money to retailers. 
B)  buy installment loans from retailers. 
C)  sell installment loans to retailers. 
D)  lend money to consumers. 
E)  sell installment loans to banks.

Question 18

INSTRUCTIONS: 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.
-A [sales finance company | captive finance company] purchases notes drawn up by sellers of typically big-ticket items.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 19

Regarding student loans,which of the following is not true?

Accepted Answer

A)  They are available for both undergraduate and graduate students. 
B)  Applications can be filled out on the Internet. 
C)  There is no limit on how much can be borrowed. 
D)  There is no limit on the number of loans one can have. 
E)  Interest may be tax deductible. 
A)  They are available for both undergraduate and graduate students. 
B)  Applications can be filled out on the Internet. 
C)  There is no limit on how much can be borrowed. 
D)  There is no limit on the number of loans one can have. 
E)  Interest may be tax deductible.

Question 20

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

Accepted Answer

A) True 
 B)False

Student loans are made by banks and other financial institutions,but students apply for these loans through their universities.

If the add-on method is used to calculate a finance charge of $150.80 on a $2,200 loan,the amount to be repaid is $2,200.

INSTRUCTIONS: 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. -Loan repayment of a [Perkins | PLUS] loan would not begin until a student is out of school.

Commercial banks are generally more selective in granting loans than finance companies.

Mike and Amanda have been reviewing their financial statements.Using the following information,they have asked you to determine their debt safety ratio and advise them about assuming more debt in the future.

GMAC is an example of a captive sales finance company.

INSTRUCTIONS: 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 longer the loan maturity,the [lower | higher] the monthly payments will be.

INSTRUCTIONS: 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. -When interest rates are falling,you would prefer a [fixed-rate | variable-rate] loan.

The majority of loans made by savings and loan associations are ____ loans.

A characteristic of consumer loans is that they

Consolidation loans are used to purchase new furniture and appliances when many items are needed at the same time.

INSTRUCTIONS: 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. -Consolidation loans are generally [inexpensive | expensive].

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

A note is the

Most loans made by consumer finance companies are for larger amounts and are made to low risk borrowers.

Sales finance companies

Regarding student loans,which of the following is not true?

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

Understanding the Financial Planning Process

Your Financial Statements and Plans

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

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 7: Using Consumer Loans

Student loans are made by banks and other financial institutions,but students apply for these loans through their universities.

If the add-on method is used to calculate a finance charge of $150.80 on a $2,200 loan,the amount to be repaid is $2,200.

INSTRUCTIONS: 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. -Loan repayment of a [Perkins | PLUS] loan would not begin until a student is out of school.

Commercial banks are generally more selective in granting loans than finance companies.

Mike and Amanda have been reviewing their financial statements.Using the following information,they have asked you to determine their debt safety ratio and advise them about assuming more debt in the future.

GMAC is an example of a captive sales finance company.

INSTRUCTIONS: 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 longer the loan maturity,the [lower | higher] the monthly payments will be.

INSTRUCTIONS: 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. -When interest rates are falling,you would prefer a [fixed-rate | variable-rate] loan.

The majority of loans made by savings and loan associations are ____ loans.

A characteristic of consumer loans is that they

Consolidation loans are used to purchase new furniture and appliances when many items are needed at the same time.

INSTRUCTIONS: 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. -Consolidation loans are generally [inexpensive | expensive].

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

A note is the

Most loans made by consumer finance companies are for larger amounts and are made to low risk borrowers.

Sales finance companies

Regarding student loans,which of the following is not true?

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

Understanding the Financial Planning Process

Your Financial Statements and Plans

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

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