FIN 101 Final Exam

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The greatest fixed cost involved with owning an automobile is usually the auto insurance payments

False

Credit report is routinely used to predict credit worthiness

True

Saving is the preferred way to provide for financial emergencies

True

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

IRA withdrawals can be made without paying tax penalty any time after you reach the age of 59 1/2.

true

If you are eligible to receive a tax refund, you will have to file a tax return to get the refund.

true

If you buy a zero coupon bond, you will receive no cash from the corporation until the bond matures.

true

One could expect to earn a higher rate of interest on a certificate of deposit than on a checking account

true

One's average tax rate is typically lower than one's marginal tax rate.

true

The greatest fixed cost involved with owning an automobile is usually the monthly loan payments.

true

The market price of a house is $125,000 and the homebuyer will borrow $100,000. Two points will equal $2,000.

true

You can deduct mortgage interest and property taxes on your home to reduce your federal income taxes only if you itemize deductions.

true

a balance sheet shows your financial condition as of certain point in time

true

a lender will generally require mortgage insurance if the down payment is less than 20 percent

true

a significant legal difference between a cooperative and a condominium is that the condominium owner normally holds a title to the property

true

anyone can legally prepare tax returns and charge a fee for that service

true

convenience and improved record keeping are two advantages sited for on-line bill payment

true

credit unions typically pay higher rates of return on savings than banks and savings and loan associations

true

Paying only the minimum payment each time on a credit card usually enables one to pay off the balance fairly quickly.

False

Alimony received is included in gross income for the receiver and a tax deduction for they payer

True

Assets purchased on credit should be included on the asset side of the balance sheet.

True

The federal personal income tax is a progressive tax

True

The income and expenditures statement provides a measure of financial performance over a period of time

True

The most common method used by lenders to apply finance charges to credit cards is the average daily balance including new purchases method

True

The purpose of a credit report is to evaluate the kind of risk you pose to the lender

True

Using time value of money is important when planning for long-term goals

True

It is safe, and often required, to give your social security number as a form of identification when using a credit card

false

Low-balling is a sales technique where the salesperson quotes a low price for a car to get you to purchase a different, more expensive vehicle.

false

Tax preparers must be licensed by either the state of federal government

false

all taxpayers have an equal probability of having their tax returns audited

false

asset management accounts, offered primarily by brokerage firms, are protected by the federal deposit insurance corporation

false

banks and other financial institutions insure the contents of safe-deposit boxes

false

budgeting and record keeping are really the same activity

false

in a co-op, the buyer receives title to a unit and joint ownership of the common areas

false

interest rates on credit cards tend to be lower than most other forms of consumer credit

false

the best way to balance your budget is to increase borrowing

false

the down payment is typically the only substantial housing cost that must be paid at the time of the purchase

false

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

gasoline is a variable cost of automobile ownership

true

if a buyer withdraws from a transaction without s valid reason after signing a sales contract, he typically loses his earnest money

true

tax credits are dollar-for-dollar reduction in taxable income

true

terminating a car lease before expiration is often difficult and costly

true

the annual percentage yield (APY) formula otherwise called effective annual rate (EAR) considers compounding when determining an interest rate

true

the cost of a title search and title insurance are typically part of the closing costs on a housing transaction

true

the higher the tax bracket you are in, the more attractive the purchase of municipal bonds becomes

true

the money factor on an auto lease is similar to the interest rate on a loan

true

you can deduct mortgage interest and property taxes on your home to reduce your federal income taxes only if you itemize deductions

true

you should not talk with the car dealer about a trade in until after you have negotiated the final price on the car you are purchasing

true


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