Finance 223 Exam #3
Which of the following is a disadvantage of a car lease?
At the end of the lease, you have no ownership in the vehicle
What does ATM stand for?
Automatic teller machine
When Jane researched the brands and prices of refrigerators she was doing what?
Comparison shopping
Which of the following is an advantage of a car lease?
Monthly lease payments are usually lower than monthly finance payments
Which of the following is an example of closed ended credit?
Mortgage Loan
Which of the following primarily provides loans for home purchases?
Mortgage company
Trenton wants to buy a house but can only provide 10% down he will probably be required to have what?
Private Mortgage Insurance (PMI payments)
These products are sold by one chain stores and are low cost alternatives to famous name brand products?
Private label or store brands
Which of the following is an advantage of renting?
Renters have fewer responsibilities for maintenance than home owners
A cash advance?
Requires you to pay interest everyday until you repay the cash advance
The expected value of a vehicle at the end of a lease is called what?
Residual value
The amount printed on a label with the suggested retail price that is posted on the vehicle is called what?
Sticker price
Which of the following is a disadvantage of renting (homes)?
Tenants can not take tax deductions for mortgage interest and property deductions
T/F If you think that (interest) rates will fall in the future, you should buy a long term CD to lock in the rate now?
True
T/F Renters insurance protects the tenant by covering damage or theft to clothing furniture, and stereo equipment?
True
T/F The information gathered from your loan application and the credit bureau are factors of your credit rating?
True
T/F The largest fixed expense associated with a new vehicle is depreciation?
True
T/F Your lifestyle affects your housing decision?
True
A credit-card holder who pays off his balance each month is known as what?
convenience user
A legal document that includes information about the due date of monthly rent is called what?
lease
Which of the following offers a full range of financial services including checking, savings, and lending and other services?
A commercial bank
Which of the following questions should be asked?
All of the above (all three of those)
A time deposit is also know as what?
A savings account
What should a homebuyer consider when buying a house?
All of the above
Which of the following can result from a failure to repay a loan?
All of the above
Which of the following is a valid reason for using credit?
All of the above (all four)
Lemon laws have been acted in 48 of the 50 states for new vehicles purchases?
False
T/F A commercial bank is the same thing as a credit union
False
T/F A disadvantage of using credit is using the convince it offers when making a hotel reservation or renting a car?
False
T/F A disadvantage to home ownership is the deductibility of mortgage interest and real estate taxes?
False
T/F A duplex is a house with two or more separate dwellings
False
T/F A saving account is known as a demand deposit?
False
T/F Each year check writing is being used more often?
False
T/F Making transactions using a credit card will immediately reduce your balance?
False
T/F One of the first steps in a new car purchase negotiation should be a discussion of the trade in vehicle
False
T/F Prices at the local convenience store will probably be lower than at the national retail grocer?
False
T/F Rental insurance isn't important since the landlord insurance covers all tenants' belongings
False
T/F The FDIC insures up to $200,000 in a bank account?
False
T/F Economists recognize consumer credit as a major force in the American economy?
True
The tenant is known as what?
Leasee
The owner/landlord is known as what?
Lessor
A credit card is a type of what?
Loan/borrowing
T/F Credit can indicate stability since lenders consider you a good risk
True
T/F A credut card holder who pays the full balance during the grace period each month is actually getting a free loan from the credit card company?
True
T/F A lease for a car is typically 3 to 5 years
True
T/F Advantages of a lease over a purchase include that the buyer can usually obtain a more expensive vehicle and the monthly lease payments are usually lower than the monthly financing payments
True
T/F Angela wanted to rent an apartment, so her landlord had her sign a lease, a lease is a legal document that dictates the terms of her lease?
True
T/F Close ended credit is used for a specific purpose and involves a specific amount?
True
What is perhaps the greatest disadvantage of using credit is?
the temptation to overspend