FIN Ch 6-10

I want to purchase a new home for $200,000. My bank requires LTV of 80%. What is my down payment required?

$40,000

when Stanley was visiting Elaine, he tripped on her front porch step and sprained his ankle. His injuries were covered by

Elaine's medical payments coverage

Rebecca paid extra money to reduce her mortgage interest rate. That extra money is called

POINTS

Mark was severely injured while on vacation and expect to be unable to work for at least 12 months. Because of his injury, he should expect to be eligible for disability income from

Social Security

most people receive health insurance from

a plan offered by their employer

what should a home buyer consider when evaluating a house

all of these should be evaluated: zoning laws. Location of business and future construction projects. School system. Property values of the community.

which of the following is something you should NOT do when buying a new vehicle

all; inform the salesman of your target monthly payment, discuss the trade-in value of your used car before finalizing the new car, inform the salesman you will be using an outside lender, leave a deposit so you can go home and think about your decision, do NOT do any of these when buying a new vehicle

which of the following is a disadvantage of a car lease

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

if you want to purchase term insurance, you will receive all of the following except

cash value. You will receive protection against loss of life for a specified term, temporary insurance, a benefit During the period it covers, such as 1, 5, 10, or 20 years, a policy who's coverage stops after a period of time

Nancy is studying the health insurance plan options offered by her employer. She wants a policy that will have the insurance pay a percentage of her medical expenses after she meets her deductible. She should review the

coinsurance

owl left his vehicle parked on the street and the front of his house when he went on vacation. While he was gone, his street flooded in his car was severely damaged. This damage would be covered under his

comprehensive physical damage policy

Madeline wants to purchase a larger house. However, she has not yet sold her current home. She may want to include a (n)________ in her offer.

contingency clause

all of the following are variable operating costs for a vehicle except

depreciation; operating expenses include gasoline and oil, maintenance and repairs, parking, tires

Frank and Diane want to buy a house which of the following do they need before they purchase a house?

down payment

an insurance company will

ensure pure risk, but not speculative risk

Samuel should buy insurance in order to eliminate all risk.

false

one of the first steps in a car purchase negotiation should be a discussion of the trade-in vehicle

false

private mortgage insurance is usually required if the down payment for a house is less than 30%

false

in order to ensure a car loan can be fully paid off in the event of a total accident, a consumer should purchase which of the following

gap insurance duh

which of the following is not a fixed cost associated with buying a car

gas

when purchasing a used vehicle, it is a good idea to

have a trained and trusted mechanic of your choice check out the vehicle

which of the following households most likely has the greatest need for life insurance

household with children

Fred bought life insurance five years ago. He forgot to tell them that he had a heart condition, and, as a result of that condition, he recently died. Which of the following Provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation?

incontestability clause

Cindy was contacted by her home insurance agent to discuss ways to decrease her premium. Which of the following should NOT reduce her premium?

increasing the amount of coverage

assigned benefits

insurance pays your doctor or hospital directly

which of the following is correct

medical expense plans may reimburse an individual for hospital stays, doctor's visits, and medications.

potential problem with having a long car loan is

negative equity

Barbara left a skateboard on her front steps. A 1 storm swept the skateboard up and through her window. the one storm was a

peril

Patrick has an old beater car and wants to keep his insurance costs down. In order to minimize the financial impact of an accident he may cause, he should, at a minimum, carry which type of insurance?

property damage liability

Madeline had a severe allergy attack and crashed her car into a telephone pole while sneezing. The damage to the telephone pole would be covered under Madeleine's

property damage liability policy

George is buying a new car. Which of the following techniques should he use to get the best deal?

research the actual dealer cost and begin negotiations from that point

the expected value of a vehicle at the end of a lease is called the

residual value

if you choose to avoid the risk of a traffic accident by not driving to work you are using

risk avoidance

major factors that affect the affordability of your mortgage include all of the following except

size of the home.

we use escrow to ensure payment of which of the following terms

taxes and insurance

which of the following is a disadvantage of renting

tenants cannot take tax deductions for mortgage interest and property taxes

which of the following is NOT a type of permanent insurance

term life. Permanent Insurance includes whole, straight, ordinary, and cash value life insurance

the primary benefit of a home equity loan is

the deductibility of the loan interest on federal taxes

which of the following is NOT correct

the number of small claims you have should not affect your premium

which of the following is NOT a feature of whole life insurance?

the policy will return all premiums if you survive to the end of the policy.; features include that it accumulates cash value, provides both a death benefit and a savings component, you must pay interest on any outstanding policy loans, requires that you pay a specified premium each year for the rest of your life.

Kelly selected a home and submitted an offer to the seller

the seller may choose to provide a counter offer

which of the following is NOT correct?

traditional Financial guidelines suggest that your home should cost about 5 times your annual income; true statements include: renting is usually less expensive in the short run. Homeownership usually has long-term Financial advantages. Lifestyle and financial factors should be analyzed to determine if you should rent or buy. Renting offers Mobility.

Insurance allows someone to

transfer risk

a deductible is the amount you must pay before benefits become payable by the insurance company

true

an advantage of a lease over a purchase is that the buyer can usually obtain a more expensive vehicle for the same monthly payment.

true

an example of a hazard is defective house wiring.

true

Megan wants to purchase a life insurance policy that will allow her to invest in stock. Which of the following policy should she buy?

variable life