Youve opened a savings account

Youve opened a savings account

1. If youre considering purchasing a new home, the mortgagelender will probably require a down payment. The amount willbe based on the lenders requiredA. loan-to-value ratio. C. home listing value.B. credit investigation. D. market conditions.2. Another requirement of lenders in considering mortgage loansis the borrowers ability to repay the loan. In this regard, lendersoften calculate an affordability ratio thatsA. total debt payments, including the proposed loan, tonet income.B. total monthly payments on all debt to gross income, plusmortgage payments.C. net income to total mortgage interest.D. monthly mortgage payments to monthly gross income.3. Variable auto ownership costs are most dependent onA. driver behavior. C. city lived in.B. mileage driven. D. down payment.4. There are now many different types of transaction accounts. Entities that have grown veryrapidly by pooling funds and offering check type transaction services areA. commercial banks. C. savings and loan organizations.B. credit unions. D money market mutual funds.5. Poor record keeping and bad cash management can result in a check being drawn on yourbank with insufficient funds. This problem is known as a(n)A. illiquid check. C. early withdrawal.B. overdraft. D. check draft.6. You must get money to your son in another city so that his account has good funds. Abank service that would be useful isA. electronic funds transfer. C. overnight mail.B. automated teller transaction. D. certified check.7. The day-to-day management of our finances to ensure that we have money available tomeet obligations is calledA. liquid assets. C. financial management.B. cash management. D. check balancing.8. Which of the following would you expect to pay the highest rate of interest?A. Cash C. Savings accountB. Checking account D. Certificate of deposit9. If you went to an institution that specialized in real estate mortgage loans to request a firstmortgage loan for your new house, you would probably be at aA. commercial bank. C. savings and loan.B. real estate broker. D. brokerage company.10. Youve decided to start a regular savings program. While the best amount of liquid savingsfor anyone depends on that persons unique circumstances, a rule of thumb would be tohave enough savings forA. one year of total income.B. one year of after-tax income.C. two months of after-tax income.D. three to six months of after-tax income.11. Youve opened a savings account in the amount of $10,000 with a nominal or offeredinterest rate of 5% and quarterly compounding.You leave your money in the accountfor exactly one year, ending at the end of the quarter. Approximately how much moneyis in your account, including interest?A. $10,500 C. $10,525B. $10,509 D. $10,55212. You have a regular savings plan in which youve set aside $1,000 in a money marketaccount that compounds interest every month. Assuming the nominal interest rate is 6%,how much money will you have in your account at the end of a year?A. $938.32 C. $1,061.68B. $1,060.00 D. $1,072.0013. If you calculated the interest rate that you actually earned in 11 and 12 above, you wouldhave calculated what rate?A. Nominal C. OfferedB. Traditional D. Effective14. One of your concerns when you consider opening deposit accounts is the safety of yourmoney. Fortunately, many financial institutions are insured by the Federal Deposit InsuranceCorporation (FDIC). However, the FDIC limits the amount of insurance for a single depositorto the amount ofA. $100,000. C. $1,000,000.B. $10,000. D. $1,000.15. In the lease versus buy decision for an automobile, one of the most critical economicfactors isnt known but must be estimated. That factor isA. the vehicle purchase price. C. the required payments.B. the residual value. D. the financing costs.16. If you intend to drive the same car for 10 years, you would most likelyA. buy a used car. C. enter into an open-end lease.B. enter into a closed-end lease. D. buy a new car.17. The major economic difference in evaluating an open-end lease versus a closed-end leaseisA. the term. C. the residual value.B. the interest rate. D. the down payment.18. In the rent-or-buy decision, which factor would be an important economic consideration?A. The number of bathroomsB. The ability to deduct interest expense on your tax returnC. The ages of your childrenD. The use of a real estate broker19. When buying a home, you want to make sure your ownership cant be disputed later on.One way for your settlement attorney to help ensure this is to arrange for aA. settlement binder. C. release form the listing broker.B. closing statement. D. title check.20. Youre looking for a first mortgage loan with the lowest possible interest rate and may haveto move in a few years. Therefore, the best type of loan for you is probably a(n)A. conventional fixed-rate mortgage.B. adjustable-rate mortgage (ARM).C. home equity loan.D. unconventional fixed-rate mortgage


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