Question 1

Gasoline is a variable cost of automobile ownership.

Accepted Answer

A) True 
 B)False

Question 2

As home prices have fallen in recent year,the rent ratio

Accepted Answer

A)  has increased and rent affordability has increased 
B)  has decreased and rent affordability has decreased 
C)  has increased and rent affordability has decreased 
D)  has decreased and rent affordability has increased 
A)  has increased and rent affordability has increased 
B)  has decreased and rent affordability has decreased 
C)  has increased and rent affordability has decreased 
D)  has decreased and rent affordability has increased

Question 3

If a lender requires that mortgage payments cannot exceed 30% of gross income and total loan payments cannot exceed 38% of gross income,calculate the monthly payment for which a person with the following financial data could qualify.

Accepted Answer

$5,500 * 0.3 = $1,650
$5,500 *

Question 4

When shopping for a lease,you want a

Accepted Answer

A)  high capitalized cost 
B)  low capitalize cost 
C)  high money factor 
D)  low residual value 
E)  a and d 
A)  high capitalized cost 
B)  low capitalize cost 
C)  high money factor 
D)  low residual value 
E)  a and d

Question 5

Which of the following is tax deductible if one itemizes deductions?

Accepted Answer

A)  Principal, interest, real estate taxes, and insurance 
B)  Principal, interest, and real estate taxes 
C)  Principal and interest 
D)  Interest, real estate taxes, and insurance 
E)  Interest, PMI, and real estate taxes 
A)  Principal, interest, real estate taxes, and insurance 
B)  Principal, interest, and real estate taxes 
C)  Principal and interest 
D)  Interest, real estate taxes, and insurance 
E)  Interest, PMI, and real estate taxes

Question 6

Greg has negotiated a $20,000 price on a new pick-up truck.The manufacturer is offering a $1,500 rebate or 3.9 %,three-year financing.Greg is also able to get 7 %,three-year financing at his credit union.If Greg plans to finance $18,000 over three years,should he take the rebate or the 3.9 % financing? (Show all work.)

Accepted Answer

@#IMG-DLM& Since the 3.9 % financing sav

Question 7

Barb and Bob 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 35% of gross monthly income.Based on Barb and Bob's financial data below,what is the maximum monthly mortgage payment for which they can qualify?

Accepted Answer

A)  $1,400 
B)  $1,208 
C)  $1,050 
D)  $ 850 
E)  $ 500 
A)  $1,400 
B)  $1,208 
C)  $1,050 
D)  $ 850 
E)  $ 500

Question 8

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 Real Estate Settlement Procedures Act [limits the amount of closing costs a lender can charge | requires advance disclosure of closing costs].

Accepted Answer

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

Question 9

An automobile is a personal use asset for most buyers.

Accepted Answer

A) True 
 B)False

Question 10

Reasons why auto leasing is so popular include all of the following except:

Accepted Answer

A)  lower monthly payments 
B)  lower down payment 
C)  lower total cost 
D)  getting more expensive car for the same monthly payment 
E)  rising new car prices 
A)  lower monthly payments 
B)  lower down payment 
C)  lower total cost 
D)  getting more expensive car for the same monthly payment 
E)  rising new car prices

Question 11

An escrow account is used to collect ____ from one's monthly mortgage payment.

Accepted Answer

A)  interest 
B)  principal 
C)  real estate taxes 
D)  homeowner's insurance 
E)  c and d only 
A)  interest 
B)  principal 
C)  real estate taxes 
D)  homeowner's insurance 
E)  c and d only

Question 12

The first step in the auto-buying process should be

Accepted Answer

A)  test drive several cars. 
B)  begin negotiations. 
C)  consider alternative buying strategies. 
D)  decide whether to trade in your used car or to sell if yourself. 
E)  analyze how much car you can afford. 
A)  test drive several cars. 
B)  begin negotiations. 
C)  consider alternative buying strategies. 
D)  decide whether to trade in your used car or to sell if yourself. 
E)  analyze how much car you can afford.

Question 13

Renting affords more flexibility than home ownership.

Accepted Answer

A) True 
 B)False

Question 14

To refinance a mortgage,the lender typically requires at least 20% equity in the home.

Accepted Answer

A) True 
 B)False

Question 15

A PITI payment is composed of principal,interest,real estate taxes,and insurance.

Accepted Answer

A) True 
 B)False

Question 16

Homeowner's insurance will cost about ____ percent of the market value of the home.

Accepted Answer

A)  1/4 
B)  1/4 to 1/2 
C)  1/2 
D)  1/2 to 3/4 
E)  3/4 
A)  1/4 
B)  1/4 to 1/2 
C)  1/2 
D)  1/2 to 3/4 
E)  3/4

Question 17

If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 90 percent,then the borrower must make

Accepted Answer

A)  a minimum down payment of $10,000 plus closing costs. 
B)  a minimum down payment including closing costs of $10,000. 
C)  closing costs plus points of $10,000. 
D)  a maximum down payment of $10,000. 
E)  none of these. 
A)  a minimum down payment of $10,000 plus closing costs. 
B)  a minimum down payment including closing costs of $10,000. 
C)  closing costs plus points of $10,000. 
D)  a maximum down payment of $10,000. 
E)  none of these.

Question 18

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 $4,750 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)  $ 3,710 
D)  $ 2,800 
E)  none 
A)  $13,250 
B)  $ 5,040 
C)  $ 3,710 
D)  $ 2,800 
E)  none

Question 19

The affordability ratios used to qualify applicants for FHA and VA loans are more stringent than those used for conventional loans.

Accepted Answer

A) True 
 B)False

Question 20

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.
-Longer term auto loans have a [lower rate but higher payment | higher rate but lower payment]

Accepted Answer

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

Gasoline is a variable cost of automobile ownership.

As home prices have fallen in recent year,the rent ratio

If a lender requires that mortgage payments cannot exceed 30% of gross income and total loan payments cannot exceed 38% of gross income,calculate the monthly payment for which a person with the following financial data could qualify.

When shopping for a lease,you want a

Which of the following is tax deductible if one itemizes deductions?

An automobile is a personal use asset for most buyers.

Reasons why auto leasing is so popular include all of the following except:

An escrow account is used to collect ____ from one's monthly mortgage payment.

The first step in the auto-buying process should be

Renting affords more flexibility than home ownership.

To refinance a mortgage,the lender typically requires at least 20% equity in the home.

A PITI payment is composed of principal,interest,real estate taxes,and insurance.

Homeowner's insurance will cost about ____ percent of the market value of the home.

If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 90 percent,then the borrower must make

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 $4,750 and she incurs the following costs related to housing,how much tax savings will she receive as a result of her home purchase?

The affordability ratios used to qualify applicants for FHA and VA loans are more stringent than those used for conventional loans.

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. -Longer term auto loans have a [lower rate but higher payment | higher rate but lower payment]

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

Gasoline is a variable cost of automobile ownership.

As home prices have fallen in recent year,the rent ratio

If a lender requires that mortgage payments cannot exceed 30% of gross income and total loan payments cannot exceed 38% of gross income,calculate the monthly payment for which a person with the following financial data could qualify.

When shopping for a lease,you want a

Which of the following is tax deductible if one itemizes deductions?

An automobile is a personal use asset for most buyers.

Reasons why auto leasing is so popular include all of the following except:

An escrow account is used to collect ____ from one's monthly mortgage payment.

The first step in the auto-buying process should be

Renting affords more flexibility than home ownership.

To refinance a mortgage,the lender typically requires at least 20% equity in the home.

A PITI payment is composed of principal,interest,real estate taxes,and insurance.

Homeowner's insurance will cost about ____ percent of the market value of the home.

If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 90 percent,then the borrower must make

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 $4,750 and she incurs the following costs related to housing,how much tax savings will she receive as a result of her home purchase?

The affordability ratios used to qualify applicants for FHA and VA loans are more stringent than those used for conventional loans.

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. -Longer term auto loans have a [lower rate but higher payment | higher rate but lower payment]

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