FIN exam 1 quiz questions
T or F: A lender will generally require mortgage insurance if the down payment is less than 20 percent.
True
T or F: A significant legal difference between a cooperative and a condominium is that the condominium owner normally holds a title to the property.
True
T or F: Anyone can legally prepare tax returns and charge a fee for that service
True
T or F: Capitalized cost on an auto lease is the same as the amount of the price that is being financed
True
T or F: Early termination clauses on an auto lease typically apply to cars that are stolen or totaled in an accident as well as when you just want to return the vehicle before the end of the lease.
True
T or F: One could expect to earn a higher rate of interest on a certificate of deposit than on a checking account.
True
T or F: Russ and Lois got married December 30. Since they were single for most of the year, however they can legally file as married taxpayers in the year of the wedding.
True
T or F: The market price of a house is $125,000 and the homebuyer will borrow $100,000. Two points will equal $2,000
True
T or F: The money factor on an auto lease is similar to the interest rate on a loan.
True
T or F: You can deduct mortgage interest and property taxes on your home to reduce your federal income taxes only if you itemize deductions.
True
T or F: if a buyer withdraws from a transaction without a valid reason after signing a sales contract, he typically loses his earnest money
True
T or F: the cost of a title search and title insurance are typically part of the closing costs on a housing transaction.
True
T or F: the greatest fixed cost involved with owning an automobile is usually the monthly loan payments.
True
T or F:Credit unions typically pay higher rates of return on savings than banks and saving and loan associations.
True
t or F: The annual percentage yield (APY) formula considers compounding when determining an interest rate
True
The financing rate on the car you are leasing is called the
money factor
At the end of the lease period, you may be required to
pay for unreasonable wear and tear, and pay for additional mileage
A _________ would be most likely to have to pay estimated taxes.
self-employed plumber
Which of the following are legal methods of reducing your current tax liability?
shifting income to your children
Tax credits reduce your...
tax liability
T or F: Convenience and improved record keeping are two advantages sited for on-line bill payment.
true
Mr. and Mrs. Davenport have three children ages 3, 6, and 13. their financial matters for 2019 are as follows: Adjusted Gross Income- $65,000, Un-reimbiursed medical expenses - $5,250. How much would the Davenports medical expenses contribute to their total itemized deductions?
$0
If you invest $100 at 8% for one year, compounded semiannually, at the end of the year your balance will be
$108.16
John Anderson deposited $10,000 in a CD for 3 years at 5%. It should now be worth (Use time value tables or financial calculator.)
$11,580
Sheldon has a home valued at $108,000 and an outstanding mortgage of $70,000. If his lender is willing to provide a home equity loan of up to 80% of market value, how much could Sheldon borrow using a home equity loan?
$16,400
Janie Long has checking and savings accounts in a federally insured financial institution. the maximum amount of her insurance coverage is
$250,000.
Alice lost her ATM card at the lake and forgot it was missing until her monthly statement came 26 days later. She found that $800 had been withdrawn from her savings account. the most Alice will be legally liable for assuming she notifies the bank at this point is
$500
A money factor of 0.00280 on a lease is equivalent to an annual percentage rate of
6.27
T or F: All taxpayers have an equal probability of having their tax returns audited
False
T or F: Banks and other financial institutions insure the contents of safe-deposit boxes.
False
T or F: Interest rates on credit cards tend to be lower than most other forms of consumer credit.
False
T or F: One could expect to earn a higher rate of interest on a certificate of deposit than on a checking account.
False
T or F: Tax credits are dollar for dollar reductions in taxable income
False
T or F: Tax preparers must be licensed by either the state or federal government
False
T or F: The down payment is typically the only substantial housing cost that must be paid at the time of the purchase.
False
T or F:Asset management accounts are protected by the Federal Deposit Insurance Corporation
False
Which of the following would be best suited using an internet bank? a) Nancy Johnson, a young businesswoman who uses bank financing regularly for her business. b) Milan Sosa, an older gentleman who enjoys visiting his local banker c) Molly Peterson, a woman who uses multiple bank services including safe-deposit box d) Fred Longoria, a man who uses checking and savings but never goes to his bank e) All of the above would be good candidates because the cost of internet banking is lower than other types of banks
d) Fred Longoria, a man who uses checking and savings but never goes to his bank
The loss of value in a car over time is called
depreciation
The annual percentage yield is the same as the
effective rate
The _______ is really a second mortgage on your home.
home equity line of credit
