personal finance exam 1
Private Mortgage Insurance is usually required if the down payment is less than ________ percent of the purchase price of the home.
20
A home worth $200,000 with $120,000 still owed on the mortgage would have equity of $80,000, which is ________ percent of the home's value.
40%
A $200 savings account that earns $13 interest in a year has a yield of ________ percent.
6.50
Which of the following statements regarding debit and credit card liability is correct?
A debit card carries more risk of loss to the cardholder
Which type of organization does not provide home mortgages?
Check cashing outlets
Amy Farmer is getting a loan to buy a used car. The bank wants to know the trade-in value of the car she is purchasing. Which of the 5 Cs of credit is the bank examining?
Collateral
Which of the following can affect the price of a home?
Current interest rates
Savings compounded ________ would have the highest effective yield.
Daily
If you cosign a loan and the debt is not paid off, then this fact does not become a part of your credit record.
False
The debt payments-to-income ratio is calculated by dividing your total liabilities by your net worth.
False
The more frequent the compounding, the less a person will earn on a savings account.
False
Joan Zemke expects interest rates to decline over the next few months. To maximize her long-term earnings she should use a:
Five-year certificate of deposit
A trust has the purpose of:
Managing the assets of a person
Which one of the following savings plans is not covered by federal deposit insurance?
Money Market fund with an investment company
Which of the following serves as collateral for the mortgage?
The home you buy
A debit card deducts the amount of purchases from your checking account by:
Transferring money electronically
A " no-fee" checking account that requires a non-interest-earning minimum balance of $500 has an opportunity cost of lost interest earnings.
True
Credit is an arrangement to receive cash, goods, or services now and pay for them in the future.
True
In the 5 Cs of credit, conditions refers to general economic conditions that can affect your ability to repay a loan.
True
Negotiating a purchase price for a home can involve an offer and a counteroffer
True
Real estate professionals believe that location is the most important factor to consider when selecting a home.
True
The Fair Credit Reporting Act, which regulates the use of credit reports, requires the deletion of obsolete information, and gives consumers access to their files.
True
Using a "debit card" to make purchases means you are spending your own funds. True
True
A VA-guaranteed loan program provides assistance to:
armed services veterans
Most people do not select a place of residence based on:
credit score
Brett has hired a professional to assess the soundness of the roof, foundation, and building materials of a potential home he is considering. The professional will also be checking other aspects of the home including the plumbing, heating, and cooling systems. Brett is paying for a:
home inspection
Which one of the following is not a source that provides data to credit bureaus?
internal revenue services
Which of the following represent the use of credit?
mortgage
What does it mean to sublet an apartment?
obtain another tenant to take over rent payments during the lease period
Which of the following expenses is paid from an escrow account?
property taxes
A common cost associated with renting is:
the security deposit
The most frequent users of payday loans are workers who have become trapped by debts or poor financial decisions. T/F
true
The rate of return on a savings account is also referred to as:
yield
