Question 1

What would be the total cost of leasing a vehicle for four years that requires a security deposit of $1,000 (which would be withdrawn from your portfolio,which earns 9% per year) ,has monthly lease payments of $500,and has a mileage restriction of 20,000 with excess mileage resulting in a 10 cents per mile charge.Assume that over the life of the lease you exceed the mileage limitations by a total of 8,000 miles.

Accepted Answer

A)   $24,000
B)   $24,360
C)   $24,800
D)   $25,160

Question 2

Even an unsecured personal loan should be backed by collateral.

Accepted Answer

A) True 
 B)False

Question 3

Home equity is defined as the market value of the home less the debt owed on the home.

Accepted Answer

A) True 
 B)False

Question 4

You obtain a loan of $3,000 to be repaid over one year.Assume you are charged 12% interest based on the add-on method.You monthly payments would be

Accepted Answer

A)   $280.
B)   $300.
C)   $360.
D)   $270.

Question 5

When the borrower and the lender have agreed to the specific terms of the loan these will be included in the ________.

Accepted Answer

The answer of When the borrower and the lender have...

Question 6

If the lender has the right to take certain specified assets of the borrower in the event of a default on the loan,the loan is a(n)________ loan.

Accepted Answer

The answer of If the lender has the right to...

Question 7

All of the following are true of peer-to-peer lending,except

Accepted Answer

A)   it involves online platforms.
B)   borrowers generally have high FICO scores.
C)   loans are available only for amounts less than $1,000.
D)   interest rates may be lower than at financial institution.

Question 8

Which of the following statements about student loans is not true?

Accepted Answer

A)   If you don't complete your education, you will not have to pay back your student loan.
B)   A school's financial aid office is a good source of information on student loans.
C)   Both the federal government and financial institutions participate in the student loan program.
D)   Interest is often deferred and there can be tax savings on the interest paid on student loans.

Question 9

Use the following two columns of items to answer the matching questions below:
-collateral

Accepted Answer

A)  assets of a borrower that back a secured loan
B)  interest rate multiplied by the principal
C)  rate that measures the finance expenses

Question 10

Disadvantages of leasing a vehicle include all of the following except

Accepted Answer

A)   no equity in the car.
B)   cost of finding a buyer for the car at the termination of the lease.
C)   responsibility for maintenance costs.
D)   additional charges beyond the monthly lease payments.

Question 11

Making extra payments on a loan does all of the following except

Accepted Answer

A)   reduces the total amount of interest paid.
B)   gives you extra income for living expenses.
C)   reduces the maturity of the loan.
D)   helps assure your good credit rating.

Question 12

Longer maturities for loans result in lower monthly payments and therefore make it easier to cover payments each month.

Accepted Answer

A) True 
 B)False

Question 13

If you agree to allow the lender to take your computer in the event you fail to make payments,the loan is which of the following?

Accepted Answer

A)   Amortized
B)   Unsecured
C)   Secured
D)   Interest free

Question 14

In determining the amount of your loan,you should ask for about 20% more than you need in order to give yourself financial flexibility in the future.

Accepted Answer

A) True 
 B)False

Question 15

Lucky Louie applied for a $5,000 loan payable in one year and was provided the following data; interest due at payoff of $750,application fee $100,credit check $75,processing fee $75.What is the APR of Louie's loan?

Accepted Answer

A)   20%
B)   17.5%
C)   22.5%
D)   There is not enough information to determine the answer.

Question 16

Regarding automobile insurance,

Accepted Answer

A)   the best time to shop for rates is while you are at the car dealership.
B)   most cars cost the same to insure if the driver is the same.
C)   it is better to compare costs before you commit to buying a particular car.
D)   you can lower your costs by buying a more expensive car that is less likely to have accidents.

Question 17

Regarding the amount of money borrowed on a loan,all of the following are true except

Accepted Answer

A)   the amount is based on how much the lender believes you can pay back in the future.
B)   you should borrow slightly more than you need to cover future inflation.
C)   you should only borrow the amount you need.
D)   you will have to pay interest on the entire amount.

Question 18

If a loan is cosigned and the borrower defaults,the lender has the right to sue the cosigner or try to seize the cosigner's assets just as if that person were the borrower.

Accepted Answer

A) True 
 B)False

Question 19

The most favorable car financing is that of

Accepted Answer

A)   commercial banks.
B)   credit unions.
C)   car dealers.
D)   There is no one best deal every time; it pays to shop around.

Question 20

Which kind of loan generally charges the lowest interest rate?

Accepted Answer

A)   Unsecured loan
B)   Secured loan
C)   Cash advance
D)   Vacation loan

Exam 9: Personal Loans

If a loan is cosigned and the borrower defaults,the lender has the right to sue the cosigner or try to seize the cosigner's assets just as if that person were the borrower.

Correct Answer
verified

Use the following two columns of items to answer the matching questions below: -collateral

Correct Answer
verified

All of the following are true of peer-to-peer lending,except

Correct Answer
verified

In determining the amount of your loan,you should ask for about 20% more than you need in order to give yourself financial flexibility in the future.

Correct Answer
verified

Longer maturities for loans result in lower monthly payments and therefore make it easier to cover payments each month.

Correct Answer
verified

If you agree to allow the lender to take your computer in the event you fail to make payments,the loan is which of the following?

Correct Answer
verified

Regarding automobile insurance,

Correct Answer
verified

Correct Answer
verified

Which of the following statements about student loans is not true?

Correct Answer
verified

Lucky Louie applied for a $5,000 loan payable in one year and was provided the following data; interest due at payoff of $750,application fee $100,credit check $75,processing fee $75.What is the APR of Louie's loan?

Correct Answer
verified

Disadvantages of leasing a vehicle include all of the following except

Correct Answer
verified

Regarding the amount of money borrowed on a loan,all of the following are true except

Correct Answer
verified

The most favorable car financing is that of

Correct Answer
verified

When the borrower and the lender have agreed to the specific terms of the loan these will be included in the ________.

Correct Answer
verified

Even an unsecured personal loan should be backed by collateral.

Correct Answer
verified

Home equity is defined as the market value of the home less the debt owed on the home.

Correct Answer
verified

Which kind of loan generally charges the lowest interest rate?

Correct Answer
verified

If the lender has the right to take certain specified assets of the borrower in the event of a default on the loan,the loan is a(n)________ loan.

Correct Answer
verified

Making extra payments on a loan does all of the following except

Correct Answer
verified

You obtain a loan of $3,000 to be repaid over one year.Assume you are charged 12% interest based on the add-on method.You monthly payments would be

Correct Answer
verified

Exam 9: Personal Loans

If a loan is cosigned and the borrower defaults,the lender has the right to sue the cosigner or try to seize the cosigner's assets just as if that person were the borrower.

Correct AnswerverifiedShow Answer

Use the following two columns of items to answer the matching questions below: -collateral

Correct AnswerverifiedShow Answer

All of the following are true of peer-to-peer lending,except

Correct AnswerverifiedShow Answer

In determining the amount of your loan,you should ask for about 20% more than you need in order to give yourself financial flexibility in the future.

Correct AnswerverifiedShow Answer

Longer maturities for loans result in lower monthly payments and therefore make it easier to cover payments each month.

Correct AnswerverifiedShow Answer

If you agree to allow the lender to take your computer in the event you fail to make payments,the loan is which of the following?

Correct AnswerverifiedShow Answer

Regarding automobile insurance,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements about student loans is not true?

Correct AnswerverifiedShow Answer

Lucky Louie applied for a $5,000 loan payable in one year and was provided the following data; interest due at payoff of $750,application fee $100,credit check $75,processing fee $75.What is the APR of Louie's loan?

Correct AnswerverifiedShow Answer

Disadvantages of leasing a vehicle include all of the following except

Correct AnswerverifiedShow Answer

Regarding the amount of money borrowed on a loan,all of the following are true except

Correct AnswerverifiedShow Answer

The most favorable car financing is that of

Correct AnswerverifiedShow Answer

When the borrower and the lender have agreed to the specific terms of the loan these will be included in the ________.

Correct AnswerverifiedShow Answer

Even an unsecured personal loan should be backed by collateral.

Correct AnswerverifiedShow Answer

Home equity is defined as the market value of the home less the debt owed on the home.

Correct AnswerverifiedShow Answer

Which kind of loan generally charges the lowest interest rate?

Correct AnswerverifiedShow Answer

If the lender has the right to take certain specified assets of the borrower in the event of a default on the loan,the loan is a(n)________ loan.

Correct AnswerverifiedShow Answer

Making extra payments on a loan does all of the following except

Correct AnswerverifiedShow Answer

You obtain a loan of $3,000 to be repaid over one year.Assume you are charged 12% interest based on the add-on method.You monthly payments would be

Correct AnswerverifiedShow Answer

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