Question 1

The student loans with the best loan terms are the Stafford and the Perkins loans.

Accepted Answer

A) True 
 B)False  True

Question 2

Jamil is purchasing a new truck for $30,000.Jamil is making a $2,000 down payment,and he will make 60 monthly payments of $541 each.What are the total finance costs on this loan?

Accepted Answer

Loan amount = $28,000 ($30,000 - $2,000) Total monthly payments = $32,460 ($541 * 60) Total cost of loan = $4,460

Question 3

Savings and loan associations dominate the consumer loan market.

Accepted Answer

A) True 
 B)False  False

Question 4

Installment loans are typically repaid in monthly payments.

Accepted Answer

A) True 
 B)False

Question 5

It is becoming increasingly frequent for longer-term installment loans to carry variable interest rates.

Accepted Answer

A) True 
 B)False

Question 6

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 7

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-About [27% | 47%] of student loans are past due.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 8

In order to receive student loans,the student must be making satisfactory progress in his academic program.

Accepted Answer

A) True 
 B)False

Question 9

A single payment loan

Accepted Answer

A)  is generally unsecured by collateral. 
B)  usually matures in one year or less. 
C)  usually matures in five to seven years. 
D)  is generally used to finance auto purchases. 
E)  is provided by sales finance companies. 
A)  is generally unsecured by collateral. 
B)  usually matures in one year or less. 
C)  usually matures in five to seven years. 
D)  is generally used to finance auto purchases. 
E)  is provided by sales finance companies.

Question 10

Both single-payment and installment loans can have variable interest rates.

Accepted Answer

A) True 
 B)False

Question 11

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-Almost half of all consumer loans are made by [commercial banks | finance companies].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 12

The monthly payment on an 8%,36-month,add-on loan for $10,000 would be

Accepted Answer

A)  $278 
B)  $300 
C)  $314 
D)  $344 
E)  $380 
A)  $278 
B)  $300 
C)  $314 
D)  $344 
E)  $380

Question 13

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The longer the loan maturity,the [lower | higher] the monthly payments will be.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 14

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The Rule of 78 is used to calculate [APR | balance due] when an installment loan is paid off early.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 15

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 16

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-Credit life insurance [is | is not] a good financial deal from the perspective of the borrower.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 17

The most popular use of consumer loans is to

Accepted Answer

A)  purchase a car. 
B)  finance a college education. 
C)  finance a vacation. 
D)  buy a house. 
E)  buy furniture. 
A)  purchase a car. 
B)  finance a college education. 
C)  finance a vacation. 
D)  buy a house. 
E)  buy furniture.

Question 18

Installment loans using the simple interest method

Accepted Answer

A)  have the highest finance charges of any method. 
B)  have interest charged only on the monthly loan balance. 
C)  do not have balloon payments. 
D)  have a lower APR than the stated interest rate. 
E)  have a higher APR than the stated interest rate. 
A)  have the highest finance charges of any method. 
B)  have interest charged only on the monthly loan balance. 
C)  do not have balloon payments. 
D)  have a lower APR than the stated interest rate. 
E)  have a higher APR than the stated interest rate.

Question 19

Cash value loans are available from all types of life insurance policies.

Accepted Answer

A) True 
 B)False

Question 20

Loans from whole life insurance policies are structured so that the interest rate on the loan is set at the time the loan is made.

Accepted Answer

A) True 
 B)False

The student loans with the best loan terms are the Stafford and the Perkins loans.

Jamil is purchasing a new truck for $30,000.Jamil is making a $2,000 down payment,and he will make 60 monthly payments of $541 each.What are the total finance costs on this loan?

Savings and loan associations dominate the consumer loan market.

Installment loans are typically repaid in monthly payments.

It is becoming increasingly frequent for longer-term installment loans to carry variable interest rates.

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -About [27% | 47%] of student loans are past due.

In order to receive student loans,the student must be making satisfactory progress in his academic program.

A single payment loan

Both single-payment and installment loans can have variable interest rates.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Almost half of all consumer loans are made by [commercial banks | finance companies].

The monthly payment on an 8%,36-month,add-on loan for $10,000 would be

INSTRUCTIONS: Choose the word or phrase in [ ] which 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. -The Rule of 78 is used to calculate [APR | balance due] when an installment loan is paid off early.

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Credit life insurance [is | is not] a good financial deal from the perspective of the borrower.

The most popular use of consumer loans is to

Installment loans using the simple interest method

Cash value loans are available from all types of life insurance policies.

Loans from whole life insurance policies are structured so that the interest rate on the loan is set at the time the loan is made.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

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

The student loans with the best loan terms are the Stafford and the Perkins loans.

Jamil is purchasing a new truck for $30,000.Jamil is making a $2,000 down payment,and he will make 60 monthly payments of $541 each.What are the total finance costs on this loan?

Savings and loan associations dominate the consumer loan market.

Installment loans are typically repaid in monthly payments.

It is becoming increasingly frequent for longer-term installment loans to carry variable interest rates.

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -About [27% | 47%] of student loans are past due.

In order to receive student loans,the student must be making satisfactory progress in his academic program.

A single payment loan

Both single-payment and installment loans can have variable interest rates.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Almost half of all consumer loans are made by [commercial banks | finance companies].

The monthly payment on an 8%,36-month,add-on loan for $10,000 would be

INSTRUCTIONS: Choose the word or phrase in [ ] which 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. -The Rule of 78 is used to calculate [APR | balance due] when an installment loan is paid off early.

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Credit life insurance [is | is not] a good financial deal from the perspective of the borrower.

The most popular use of consumer loans is to

Installment loans using the simple interest method

Cash value loans are available from all types of life insurance policies.

Loans from whole life insurance policies are structured so that the interest rate on the loan is set at the time the loan is made.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

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