HDFS Exam 3

Prices on big ticket items such as vehicles, furniture, appliances and electronic equipment are usually the same from seller to seller.

False

The security deposit is the amount paid in advance to a landlord for normal wear and tear on rental property.

False

The sticker price on a new car is typically the final sales price.

False

When considering insurance, loss frequency is more important than loss severity.

False

What is the first step in the risk management process?

Identify loss exposures

Buying without fully considering priorities and alternatives is called what?

Impulse buying

Fire, theft, illness and accidents are all examples of _____.

Perils

Property insurance protects you from financial losses resulting from the damage to or destruction of property or possessions.

True

The larger the downpayment the one can make on a purchase, the easier the payments will fit into one's budget.

True

When researching safety on a vehicle, you should check on recalls.

True

Owning more on a vehicle loan than the vehicle is actually worth is called being ______

Underwater/upside down

The primary difference between a speculative risk and a pure risk is that there's a chance for _____ in a speculative risk but a chance for ______ in a pure risk.

gain and loss; only loss

Monthly fees assessed to buyers of cooperatives include funds for ____.

​All of these. ​management fees. ​payment on the cooperative's debt. ​insurance covering the building(s).

With ____ the agreement stays in effect unless either party gives proper notice.

​a periodic tenancy lease

Jillian wants to rent an apartment that has monthly rent payments of $850 and requires a $400 security deposite and a $500 damage deposit. In order to move in, Jillian will probably be required to pay how much?

$1,750

A point as defined in the real estate market is what % of the loan amount?

1%

Which is not a step in the planned buying process?

1. Prioritizing wants 2. Preshopping research 3. Fitting your budget 4. Comparison shopping 5. Negotiating 6. Making the decision 7. Evaluating the decision

_____ should be completed before interacting with sellers.

All of the above

When negotiating to purchase a vehicle, besides the price, what other variables should be considered?

All of these

increase in the value of a home is called what?

Appreciation

The escrow account is used to accumulate funds for ____.

Both homeowner's insurance premiums and real estate property taxes.

____ Is when the home is financially and legally transferred to the new owner.

Closing

A form of housing ownership where the owner holds legal title to a specific housing unit and a proportionate interest in the common grounds and facilities is ______.

Condominium

Dividing the price of a product by the number of times it will likely be used provides its what? and provides a way to compare among competing purchase options.

Cost-per-unit

Habitability standards for rental property would not include things such as _____.

Dishwashers

Owning a big screen T.V is called a _____ while the potential theft of that T.V is called _____.

Exposure; perils

A lease typically protects a landlord but not the renter.

False

In administering a risk management program you should use the maximum possible loss as a guide for the dollar amount of coverage to buy.

False

The financial product used for transferring and reducing risk by having a large number of people share in the financial losses suffered by the members of the group is called ___.

Insurance

Amount borrowed under a mortgage loan divided by the initial purchase price is known as what?

LTV Ratio

The types of insurance you carry but which covers losses suffered by others is called what kind of insurance?

Liability

A person who leaves his/her insured car running when he/she runs into the convenience provides an example of a _____ hazard.

Morale

A loan to purchase real estate in which the real estate itself serves as the collateral is a _____ loan.

Mortgage

___ insurance is generally required when a borrower makes a minimum down payment.

Mortgage

In this type of lease, you must pay any difference between the projected residual value of the vehicle and it's actual market value at the end of the lease period.

Open end lease

The key to success in negotiating a car purchase is to obtain the _____ before discussing any other aspects of the deal.

Price for the car

The PITI acronym in mortgage lending stands for what?

Principal, interest, taxes, insurance

A ____ is a refund of part of the purchase price.

Rebate

A vehicle lease is essentially what?

Rental

Which is not an additional charge when leasing an automobile?

Residual value

Deciding not to drive a car is an example of handling risk through ____.

Risk avoidance

People who are uncomfortable with risk and who avoid it whenever they can are using the approach of _____.

Risk avoidance

The decision not to buy collision insurance on an old car is called ____.

Risk retention

When purchasing insurance you should _____.

Shop around for the lowest cost coverage

Which of the following is not a peril?

Smoking

When a tenant who wants to move before his or her lease is up and leases to another tenant, this is called what?

Subleasing

When a star football running back pays an insurance company to insure his legs, this is an example of ____.

Transferring risk

A risk transfer is any arrangement where an insurance company agrees to reimburse you for a financial loss.

True

An illivised credit purchase can have negative effects on your budget for years. (T/F)

True

Buying a home represents the largest expenditure most people ever make.

True

In most jurisdictions, landlords are prohibited from harassing tenants who report violations of building codes and other tenant rights. (T/F)

True

It is wise to make a list of all damages and defects in an apartment before moving in and when moving out.

True

One should assume risk that are affordable and insure against losses that are unaffordable.

True

Pre Shopping research for new cars should focus on what?

a. trade-in value. b.NOT gap insurance. c. fuel costs d. the real price of the vehicle

With a close end lease there is _____.

at the end of the lease term, you return the car and, unless there is excessive mileage or excessive wear on the car, you can generally just walk away without having to pay any additional amount.

The true cost of an automobile to the dealer is ______.

invoice price less any dealer discounts

When comparing buying vs renting comparable housing, renting requires a ______ annual cash flow, while buying typically _______ ones tax liability.

lower;decrease