Personal Finance Chapter 5

अब Quizwiz के साथ अपने होमवर्क और परीक्षाओं को एस करें!

A behavioral bias in which an individual tends to allow an initial estimate (of value or price) to dominate the subsequent assessment (of value or price) regardless of new information to the contrary is called _____.

anchoring

A foreclosure happens when:

the lenders attempt to recover loan balances from the insolvent borrowers by forcing the sale of the home pledged as collateral

Variable auto ownership costs are dependent on:

the miles covered by the automobile

The first step in the auto-buying process should be:

to analyze how much you can afford to spend on the car.

Jana has $1,500 for a down payment and thinks she can afford monthly payments of $300. If she can finance a vehicle with a 7 percent, 4-year loan from a credit society, what is the maximum loan amount Jana can afford?

$12,528

Henry has $2,500 for a down payment and thinks he can afford monthly payments of $400. If he can finance a vehicle with an 8 percent, 3-year loan from a local bank, what is the maximum amount Henry can spend on the car?

$15,265

Kurt has $4,500 for a down payment and thinks he can afford monthly payments of $300. If Kurt can finance a vehicle with a 7 percent, 4-year loan from the automobile dealer, what is the maximum amount he can afford to spend on the car?

$17,028

_____ is a situation where homeowners owe more to the lenders than what their properties are worth.

A negative equity

Which of the following is a type of down payment that lowers the potential depreciation and therefore your monthly lease payments on a leased car?

Capital cost reduction

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

False

Which of the following is true of buying a used car as compared with a new car?

Purchasing a used car will be less expensive as compared with purchasing a new car.

Phil and Christina are recently married and are unsure of where they will be relocated after Christina finishes her residency in 9 months. Based on this information, which of the following housing recommendations would be most appropriate for them?

Renting a home

Which of the following is a fixed auto ownership cost?

The cost of automobile insurance

Lowballing is a sales technique where the salesperson quotes a low price for a car to get you to make an offer, and negotiates the price upward prior to signing the sales agreement.

True

Prequalification provides a home buyer with information regarding the specific mortgage amounts he or she is eligible for subject to the expected changes in interest rates.

True

The market price of a house is $125,000, and the home buyer borrows $100,000. Two points are equal to $2,000.

True

The property listing in a local multiple listing service (MLS) cannot be accessed by all buyers and sellers.

True

At the end of your car lease period, you intend to turn in the car, and you will not pay extra at that time based on the residual value of the car. You have _____ lease.

a closed-end

When you lease your apartment from a nonprofit corporation that owns the building and you own a share of the nonprofit corporation, you own:

a cooperative apartment

When shopping for a lease, you want:

a low capitalized cost

The price of the car you are leasing is called the:

capitalized cost

Jacob has taken an SUV on lease from Free Cruisers Inc. for a period of four years. Jacob does not need to pay any extra amount, based on the residual value of the car, at the end of the fourth year. He has a _____.

closed-end lease

When you receive title to an individual unit and a joint ownership of any common areas and facilities, you have purchased a:

condominium

The loss in the value of an automobile over time is called:

depreciation

The financing rate on a lease similar to the interest rate on a loan is called the _____.

money factor


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