FIN 223 Exam CH 4,5,6,7
an example of an open account credit would be a bank DEBIT CARD or CREDIT CARD
credit card
DEPRECIATION or AMORTIZATION is a loss of value in a asset over a period of ownership
depreciation
consolidation loans are generally INEXPENSIVE or EXPENSIVE
expensive
Using credit is the ideal way to provide for financial emergencies
false
the key to credit worthiness is to keep your debt safety ratio as high as possible
false
you can stop payment when you purchase an item with debit
false
commercial banks insured by
federal deposit insurance corporation
credit unions are more likely to be paying HIGHER or LOWER interest rates on their account
higher
the decision to grant you credit will be made by INDIVIDUAL CREDITORS or CREDIT BUREAUS
individual creditors
homeowners may be able to deduct mortgage PRINCIPLE or INTEREST from their taxable income
interest
having some type of overdraft protection with your bank will end up costing you MORE or LESS than having a check bounce
less
it would make sense to purchase a vehicle at the end of a close ended lease period if the residual value is MORE or LESS than cars market value
less
is LESSOR or LEASEE is another term for the landlord
lessor
credit unions are
member owned financial cooperatives
a person who pays their balance off every month should look for a credit card with LOW INTEREST or NO ANNUAL FEE
no annual fee
an improper use of extended credit would be to buy a CAR or NON DURABLE GOODS
non durable goods
to establish credit worthiness you should probably
open a checking and savings account
borrowing from relatives is HIGHLY or SELDOM recommended
seldom
sometimes it may be better to use savings rather than borrowing, this is recommended when
the cost of borrowing is greater than interest earned on savings
a closed ended automobile lease is the most popular type of lease
true
as a home owner the fed gov may allow you to deduct interest expenses and/or taxes on the property
true
automobiles tend to decrease in value over time
true
bank credit card cash advances will accrue interest charges immediately
true
consumer loans most commonly used to obtain durable goods
true
credit union members are expected to have some common bond
true
credit unions grant loans only to members of the union
true
fdic insures depositers funds up to 250k at member banks under same depositers name
true
having fully repaid a small loan will help improve your credit worthiness
true
loan to value ratio of 80% would require buyer to make 20% down payment.
true
the purpose of a credit report is to evaluate the risk you pose to the lender
true
most creditors WILL or WILL NOT be willing to work with you
will
as a percentage of take home pay monthly consumer credit payments should not exceed
20 percent
an important rule for establishing a savings plan is to
all of the above
to research used car prices you can check popular price guidelines using
all three
the first step in the auto buying process should be
analyzing how much you can afford to spend on a car
low interest rates that have persisted since the fin crisis of 08 09 have been a net benefit to BORROWERS or RETIREES
borrowers
what is the most pop use of a consumer loan
buying a car
an investor would typically expect to recieve higher interest rates on CERT OF DEPOSIT or TREASURY BILL
cert of deposit
lenders often look to the five C of credit
character; key factor in the borrowers willingness to live up to the terms of the loan. Capacity; the ability of the borrower to service the loan in a timely fashion. Collateral; something of value that is used to secure a loan and that the lender can claim in case of default. Capital; amount of unencumbered assets owned by the borrower used as another indicator of the borrower's ability to repay. Condition; the extent to which prevailing economic conditions could affect the borrowers ability to service a loan.
a CHECKING or SAVINGS account is called a demand deposit account
checking
with a CLOSE ENDED or OPEN ENDED lease you turn in the car at the end and have no additional obligation
closed
the best loan rates for loans are usually from SAVINGS AND LOAN ASSOC. or CONSUMER FINANCE COMPANIES
consumer finance companies