Personal Finance: Chapters 4-7 Exam

eight

Following the signing of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, debtors seeking to erase all debts will have to wait _____ year(s) from their last bankruptcy before they can file again. a. one b. three c. seven d. eight e. ten

Lease

A legal document that includes information about the due date of monthly rent is called a a. Lease b. Lessee c. Lessor d. Rental statement e. Sublease

$221

Given the following information here, what should Jason's adjusted bank balance for his bank reconciliation be? Bank balance: $300 Outstanding checks: $129 Deposit in transit: $50 ATM Fees: $26 Interest earned: $5 Checkbook balance: $242 a. $113 b. $171 c. $221 d. $242 e. $300

Will be higher than the stated rate.

If a loan is being paid in installments instead of one lump sum at the end of the loan period, the actual rate of interest a. Will be lower that the stated rate. b. Will be the same as the stated rate. c. Will be higher that the stated rate. d. Will be unrelated to the stated rate. e. Cannot be determined without knowing the length of the loan period.

You are entitled to a free copy of your credit report.

If you are denied credit, a. You have a legal right to sue the credit bureau. b. Your parent can purchase a copy of your credit report. c. You have a legal right to sue the company that denied you credit. d. The denial will remain in your credit file for 10 years e. You are entitled to a free copy of your credit report.

60 days

If you are denied credit, you can contact the credit bureau and ask for a copy of your credit report. The bureau cannot charge a fee for this service as long as you ask to see your files within ________ of notification that your credit application has been denied. a. 10 days b. 20 days c. 30 days d. 60 days e. 90 days

A lawyer or title company to assist with the contract, closing, and other legal matters.

If you are selling your house by owner, you should still enlist the assistance of a. A real estate agent to help with the closing. b. A lawyer or title company to assist with the contract, closing, and other legal matters. c. Your brother-in-law to aid with legal issues of the sale. d. A real estate agent to help with marketing efforts. e. All of these are correct.

File a police report

If you think your identity has been stolen, which of the following actions does the Federal Trade Commission recommend you take immediately? a. Report it to your neighbor b. Call 911 c. Contact your local bank d. File a police report e. Contact your employer

10 years

Information about a personal bankruptcy may be reported in your credit file for a. 1 year b. 3 years c. 7 years d. 10 years e. Permanently

Financial invoices

Investments, insurance, and tax assistance are tools for financial planning and are also known as a. Checking accounts b. Trusts c. Loans d. Savings accounts e. Financial services

Limited warranty

Karen bought a mixer. She received a warranty that covers only certain aspects of the product. If the product fails, she may be required to pay part of the costs for shipping or repairs. Which of the following warranties does she have? a. "As-is" warranty b. Express warranty c. Full warranty d. Implied warranty e. Limited warranty

Indexed CD

Marcus bought a certificate of deposit whose interest rate is based on the stock market. Sometimes, his earnings are higher than other similar cds and other times, his earnings are lower. He purchased a a. Bump-up CD b. Callable CD c. Portfolio CD d. Promotional CD e. Indexed CD

$23.00

Paul borrowed $200 to be repaid in one year. He paid 10% interest and a service charge of $3.00. What is his finance charge? a. $3.00 b. $20.00 c. $23.00 d. $200.00 e. $223.00

Warranty

This is a written guarantee from the manufacturer that specifies the conditions under which the product can be returned, replaced, or repaired. a. Coupon b. Open dating c. Rebate d. Unit pricing e. Warranty

PMI payments

Trenton wants to buy a house but can provide only a 10% down payment. He probably will be required to have a. Amortization b. Escrow account c. Lock d. PMI payments e. Points

All of these are questions that should be asked.

While evaluating alternatives, all of the following are appropriate questions you could ask before making a major purchase except a. Is is possible to delay the purchase or to do without the item? b. Should I pay for the item with cash or buy it on credit? c. Which brands should I consider? d. How do the price, quality, and service compare at different stores? e. All of these are questions that should be asked.

Home appraisal

When Ingrid was selling her house, she contacted Gabe, her real estate agent, to help her with the sale. Gabe's services included all of the following except a. Providing advice on features to highlight b. Screening potential buyers to determine whether they will qualify for a mortgage c. Suggesting a selling price d. Showing Ingrid's home to potential buyers e. Home appraisal

The Daily Market

Which of the following is NOT a financial publication that can provide information about financial services and economic conditions? a. The Wall Street Journal b. The Financial Times c. The Daily Market d. Bloomberg's Businessweek e. Forbes

Paying for everyday living expenses

Which of the following is NOT a valid reason for borrowing? a. Borrowing for a college education b. Paying for everyday living expenses c. Buying a car so a homemaker can return to work d. Paying for a medical emergency e. All of these are valid reasons for borrowing

Using credit can increase the amount of money that will be available to spend in the future.

Which of the following is NOT correct? a. Using credit is appropriate to pay for medical emergencies. b. Using credit can increase the amount of money that will be available to spend in the future. c. Using credit occurs when you use water or electricity. d. Using credit cards usually makes returning merchandise without a receipt easier. e. Using credit allows consumers to enjoy goods and services now and pay later.

At the end of the lease, you have no ownership interest in the vehicle.

Which of the following is a disadvantage of a car lease? a. A large down payment. b. At the end of the lease, you have no ownership interest in the vehicle. c. The capitalized cost is usually lower that the list price. d. Monthly lease payments are usually lower than monthly financing payments. e. You can usually obtain a more expensive vehicle than with an outright purchase.

A mortgage loan

Which of the following is an example of closed-end credit? a. A mortgage loan b. A department store credit card c. Overdraft protection d. Travel and entertainment cards e. All of these are examples of closed-end credit

A department store credit card

Which of the following is an example of open-end credit? a. An automobile loan b. A department store credit card c. An installment loan for purchasing furniture d. A mortgage loan e. Single lump-sum credit

Smart card

Which one of the following is a type of electronic payment? a. Certified check b. Interest-earning checking account c. Money order d. Smart card e. Traveler's check

Payment cap

Yvette has a flexible-rate mortgage that limits the amount to which her monthly payments can rise. This feature is called a(n) a. Rate cap b. FHA loan c. Negative amortization d. Payment cap e. VA loan