ISU HDFS 283 QUIZ 6 FALL10

Perfect quiz score.

1.
	Home equity/second mortgage loans have two important advantages over most other type of loans. They are   Student Response Value A. tax deductibility of payments and longer terms.  B. tax deductibility of interest and lower interest rates. 100% C. longer terms and less amortization. D. debt consolidation and no recourse clause. E. there is really not much difference with any types of loans. Score: 1/1
2.
	What are the results of choosing a loan with a longer term?   Student Response Value A. Your APR will be higher than a shorter term loan. B. Your monthly payments will be larger with a longer term loan. C. Your finance charges will be larger with a longer term loan. D. all of these are correct  E. Both Your APR will be higher than a shorter term loan and Your finance charges will be larger with a longer term loan are correct 100% Score: 1/1
3.
	Which of the following statements regarding the risk-return relationship is most correct?   Student Response Value A. Lower credit scores are associated with lower APRs.  B. Higher credit scores are associated with lower APRs. 100% C. Longer loan length is associated with lower APRs. D. Shorter loan length is associated with higher APRs. E. Both Higher credit scores are associated with lower APRs and Shorter loan length is associated with higher APRs are correct. Score: 1/1
4.
	Your brother, a banker, has just approved a loan for you, an add-on interest loan. You will borrow $2,000 for one year with a 12% annual interest rate. What is your monthly payment?   Student Response Value A. $166.67  B. $186.67 100% C. $240.00 D. $256.78 E. none of these Score: 1/1
5.
	What is the type of loan where the entire interest charge is subtracted from the loan principal before you receive the money and at maturity you repay the entire principal?   Student Response Value A. simple interest method B. partial amortization method  C. discount method 100% D. add-on method E. none of these Score: 1/1
6.
	What is the loan clause that provides for the entire loan balance to become due immediately should you miss a payment?   Student Response Value  A. acceleration clause 100% B. default contingency clause C. early payment clause D. recourse clause E. none of these Score: 1/1
7.
	A fixed interest rate loan has payments that change with the market rates of interest for the entire duration of the loan.   Student Response Value A. True  B. False 100% Score: 1/1
8.
	Suppose that you are interested in buying a home, but are unsure of how much you can afford. What is the best way to determine your prospects for obtaining a mortgage?   Student Response Value A. Calculate your debt limit ratio. B. Figure the 28/36 rule. C. Determine what your mortgage payment will be. D. Determine what your income taxes will be.  E. Both Figure the 28/36 rule and Determine what your mortgage payment will be are correct answers. 100% Score: 1/1
9.
	What is the name of the interest rate banks charge to their most creditworthy customers?   Student Response Value A. main rate B. blue chip rate  C. prime rate 100% D. premier rate E. none of these Score: 1/1
10.
	Not having health insurance could lead to filing Bankruptcy.   Student Response Value  A. True 100% B. False Score: 1/1
11.
	Student loan payments may be an obstacle when it comes to purchasing a home.   Student Response Value  A. True 100% B. False Score: 1/1
12.
	Juanita has determine that the PITI on the house she would like to purchase will be $1250 per month. What is the minimum gross salary she will need to qualify for a mortgage from a reputable lender?   Student Response Value A. $6,250 per month  B. $4,464 per month 100% C. $3,472 per month D. Not enough information available to answer the question Score: 1/1
13.
	You are a newlywed, and you and your spouse have just found your dream home. Problem is, you do not have 20% for a down payment on the house. You will probably need to obtain   Student Response Value A. EAR.  B. PMI. 100% C. FHA. D. APR. E. none of these Score: 1/1
14.
	A fixed rate mortgage is harder to budget for than an adjustable rate mortgage.   Student Response Value A. True  B. False 100% Score: 1/1
15.
	You are considering obtaining a mortgage of $220,000. A lower APR is available, but you must pay 2 points to buy the rate down. How much must you pay in dollars?   Student Response Value A. $1,100 B. $2,200 C. $3,300  D. $4,400 100% E. $6,600 Score: 1/1
16.
	Owning a large pet may severely limit your housing options.   Student Response Value  A. True 100% B. False Score: 1/1
17.
	A down payment is the initial buyer's equity in the asset being purchased.   Student Response Value  A. True 100% B. False Score: 1/1
18.
	You have just been denied for a mortgage. What steps could you take to be approved in the future?   Student Response Value A. Pay off some of your current debt. B. Save up more for a down payment. C. Look for a less expensive house.  D. all of these are correct. 100% Score: 1/1
19.
	You are in the process of purchasing a new home. Expenses that the buyer and seller incur when finalizing the transfer of the ownership of the house are called   Student Response Value A. end costs. B. finalization costs. C. transfer fees.  D. closing costs. 100% E. none of these
20.
	Open-end leases are leases in which you return the vehicle at the end of the lease and you have no further responsibilities.   Student Response Value A. True  B. False 100%