Question 1

A real estate sales contract will include:

Accepted Answer

A)  the amount you have paid as an earnest money deposit. 
B)  the terms of a mortgage loan taken from a third party. 
C)  expected home maintenance costs. 
D)  the movement in the value of the property over the last 20 years. 
E)  the current value of the properties in the neighboring locations. 
A)  the amount you have paid as an earnest money deposit. 
B)  the terms of a mortgage loan taken from a third party. 
C)  expected home maintenance costs. 
D)  the movement in the value of the property over the last 20 years. 
E)  the current value of the properties in the neighboring locations.

Question 2

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 | shorter ] the period of time you expect to live in a house, the more likely refinancing is a sound financial decision.

Accepted Answer

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

Question 3

An inflation hedge is an asset that increases in value at a rate equal to or greater than the rate of inflation.

Accepted Answer

A) True 
 B)False

Question 4

Leslie has been offered the choice of either a $1,000 rebate or a 5.5%, 48-month loan for the new car she is purchasing. If Leslie will be financing $15,000 and can get a 7.5%, 48-month loan at her credit union, should she take the $1,000 rebate or the 5.5% loan? (Show all work.)

Accepted Answer

Calculation of PMT for 7.5%, 48-month lo

Question 5

Graduated-payment mortgages and growing-equity mortgages are both examples of adjustable-rate mortgages.

Accepted Answer

A) True 
 B)False

Question 6

If the interest rate and monthly mortgage payment do not change over the life of your mortgage, you have a(n):

Accepted Answer

A)  reverse-annuity mortgage. 
B)  fixed-rate mortgage. 
C)  adjustable-rate mortgage (ARM). 
D)  rollover mortgage. 
E)  graduated-payment mortgage. 
A)  reverse-annuity mortgage. 
B)  fixed-rate mortgage. 
C)  adjustable-rate mortgage (ARM). 
D)  rollover mortgage. 
E)  graduated-payment mortgage.

Question 7

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 disadvantage of owning a hybrid is the [ high cost of battery replacement | slower acceleration rate ].

Accepted Answer

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

Question 8

_____ are loans offering low payments for the first few years, gradually increasing until year 3 or 5, and then remaining fixed.

Accepted Answer

A)  Reverse-annuity mortgages 
B)  Fixed-rate mortgages 
C)  Adjustable-rate mortgages (ARMs) 
D)  Graduated-payment mortgages 
E)  Rollover mortgages 
A)  Reverse-annuity mortgages 
B)  Fixed-rate mortgages 
C)  Adjustable-rate mortgages (ARMs) 
D)  Graduated-payment mortgages 
E)  Rollover mortgages

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. 
The interest rate on an adjustable-rate mortgage (ARM) can be increased [ automatically every year | only when the interest rate index increases ].

Accepted Answer

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

Question 10

An advantage of co-op ownership is that it makes it easier to obtain a mortgage.

Accepted Answer

A) True 
 B)False

Question 11

Jana has $1,500 for a down payment and thinks she can afford monthly payments of $300. If she can finance a vehicle with a 7%, 4-year loan from a credit union, what is the maximum loan amount Jana can afford? (Round the answer to the nearest dollar.)

Accepted Answer

A)  $12,528 
B)  $14,208 
C)  $16,028 
D)  $17,900 
E)  $18,028 
A)  $12,528 
B)  $14,208 
C)  $16,028 
D)  $17,900 
E)  $18,028

Question 12

Matt is considering the purchase of a condo on a mortgage. However, he is not sure of the amount of the mortgage he is eligible for. _____  will help him identify and correct any problems, such as credit report errors, that may arise on his application.

Accepted Answer

A)  Prequalification 
B)  A contingency clause 
C)  A Multiple Listing Service (MLS) 
D)  The seller's financial institution 
E)  A buyer ' s agent 
A)  Prequalification 
B)  A contingency clause 
C)  A Multiple Listing Service (MLS) 
D)  The seller's financial institution 
E)  A buyer ' s agent

Question 13

Jane and Smith are considering the purchase of a home in downtown Minneapolis. They approached Larson's Mortgagers Inc. to arrange for the financing needed for their home. This process of arranging with a mortgage lender in advance of buying a home is called:

Accepted Answer

A)  a foreclosure. 
B)  a contingency auction. 
C)  prequalification. 
D)  a real estate short sale. 
E)  diversification. 
A)  a foreclosure. 
B)  a contingency auction. 
C)  prequalification. 
D)  a real estate short sale. 
E)  diversification.

Question 14

You should secure the trade-in value of your current automobile before you start negotiating the final price on the car you are purchasing.

Accepted Answer

A) True 
 B)False

Question 15

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 purchase price of the house you are buying is $180,000. A loan-to-value ratio of 90% will produce a mortgage amount of [ $162,000 | $180,000 ].

Accepted Answer

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

Question 16

Judy has $2,000 for a down payment on a vehicle, and she can afford monthly payments of $400. If lenders are currently offering 6% interest on 5-year loans, what is the maximum price Judy can pay for a vehicle? (Show all work.)

Accepted Answer

In order to calculate how much Judy can

Question 17

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

Accepted Answer

A)  minimum down payment of $10,000 plus closing costs. 
B)  minimum down payment of $10,000 including closing costs. 
C)  maximum down payment of $10,000 including closing costs and mortgage points. 
D)  maximum down payment of $10,000. 
E)  minimum down payment of $90,000 including closing costs. 
A)  minimum down payment of $10,000 plus closing costs. 
B)  minimum down payment of $10,000 including closing costs. 
C)  maximum down payment of $10,000 including closing costs and mortgage points. 
D)  maximum down payment of $10,000. 
E)  minimum down payment of $90,000 including closing costs.

Question 18

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

Question 19

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. 
There is direct ownership of your living space in a [ condo | co-op apartment ].

Accepted Answer

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

Question 20

A behavioral bias in which an individual tends to allow an initial estimate (of value or price) to dominate the subsequent assessment (of value or price) regardless of new information to the contrary is called:

Accepted Answer

A)  foreclosing. 
B)  anchoring. 
C)  depreciating. 
D)  leasing. 
E)  cooperating. 
A)  foreclosing. 
B)  anchoring. 
C)  depreciating. 
D)  leasing. 
E)  cooperating.

A real estate sales contract will include:

An inflation hedge is an asset that increases in value at a rate equal to or greater than the rate of inflation.

Leslie has been offered the choice of either a $1,000 rebate or a 5.5%, 48-month loan for the new car she is purchasing. If Leslie will be financing $15,000 and can get a 7.5%, 48-month loan at her credit union, should she take the $1,000 rebate or the 5.5% loan? (Show all work.)

Graduated-payment mortgages and growing-equity mortgages are both examples of adjustable-rate mortgages.

If the interest rate and monthly mortgage payment do not change over the life of your mortgage, you have a(n):

_____ are loans offering low payments for the first few years, gradually increasing until year 3 or 5, and then remaining fixed.

An advantage of co-op ownership is that it makes it easier to obtain a mortgage.

Jana has $1,500 for a down payment and thinks she can afford monthly payments of $300. If she can finance a vehicle with a 7%, 4-year loan from a credit union, what is the maximum loan amount Jana can afford? (Round the answer to the nearest dollar.)

Matt is considering the purchase of a condo on a mortgage. However, he is not sure of the amount of the mortgage he is eligible for. _____ will help him identify and correct any problems, such as credit report errors, that may arise on his application.

Jane and Smith are considering the purchase of a home in downtown Minneapolis. They approached Larson's Mortgagers Inc. to arrange for the financing needed for their home. This process of arranging with a mortgage lender in advance of buying a home is called:

You should secure the trade-in value of your current automobile before you start negotiating the final price on the car you are purchasing.

Judy has $2,000 for a down payment on a vehicle, and she can afford monthly payments of $400. If lenders are currently offering 6% interest on 5-year loans, what is the maximum price Judy can pay for a vehicle? (Show all work.)

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

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

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. There is direct ownership of your living space in a [ condo | co-op apartment ].

A behavioral bias in which an individual tends to allow an initial estimate (of value or price) to dominate the subsequent assessment (of value or price) regardless of new information to the contrary is called:

Understanding the Financial Planning Process

Developing Your Financial Statements and Plans

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 and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 5: Making Automobile and Housing Decisions

A real estate sales contract will include:

An inflation hedge is an asset that increases in value at a rate equal to or greater than the rate of inflation.

Leslie has been offered the choice of either a $1,000 rebate or a 5.5%, 48-month loan for the new car she is purchasing. If Leslie will be financing $15,000 and can get a 7.5%, 48-month loan at her credit union, should she take the $1,000 rebate or the 5.5% loan? (Show all work.)

Graduated-payment mortgages and growing-equity mortgages are both examples of adjustable-rate mortgages.

If the interest rate and monthly mortgage payment do not change over the life of your mortgage, you have a(n):

_____ are loans offering low payments for the first few years, gradually increasing until year 3 or 5, and then remaining fixed.

An advantage of co-op ownership is that it makes it easier to obtain a mortgage.

Jana has $1,500 for a down payment and thinks she can afford monthly payments of $300. If she can finance a vehicle with a 7%, 4-year loan from a credit union, what is the maximum loan amount Jana can afford? (Round the answer to the nearest dollar.)

Matt is considering the purchase of a condo on a mortgage. However, he is not sure of the amount of the mortgage he is eligible for. _____ will help him identify and correct any problems, such as credit report errors, that may arise on his application.

Jane and Smith are considering the purchase of a home in downtown Minneapolis. They approached Larson's Mortgagers Inc. to arrange for the financing needed for their home. This process of arranging with a mortgage lender in advance of buying a home is called:

You should secure the trade-in value of your current automobile before you start negotiating the final price on the car you are purchasing.

Judy has $2,000 for a down payment on a vehicle, and she can afford monthly payments of $400. If lenders are currently offering 6% interest on 5-year loans, what is the maximum price Judy can pay for a vehicle? (Show all work.)

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

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

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. There is direct ownership of your living space in a [ condo | co-op apartment ].

A behavioral bias in which an individual tends to allow an initial estimate (of value or price) to dominate the subsequent assessment (of value or price) regardless of new information to the contrary is called:

Understanding the Financial Planning Process

Developing Your Financial Statements and Plans

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 and Real Estate

Planning for Retirement

Preserving Your Estate

Filters