TRUE
T/F When Ted needs more cash than he has available his choices include liquidating savings and borrowing?
FALSE
T/F A savings account is also known as a demand deposit account
FALSE
T/F A commercial bank is the same thing as a credit union
TRUE
T/F If you think that rates will fall in the future you should buy a long-term CD to lock in the rates now
FALSE
T/F The FDIC insures a depositor's savings account up to 200 thousand dollars per insured financial institutions
TRUE
T/F The information gathered from your loan application and the credit beuro are factors of your credit rating
FALSE
T/F Consumer credit refers to the use of debit cards for personal needs
TRUE
T/F Close ended credit is used for a specific purpose and involves a specific amount
TRUE
T/F A credit 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 FICO scores are used by creditors to predict how likely it is that you will repay a loan
FALSE
T/F Prices at the local convenience store will probably be lower than at the national retail grocery store
TRUE
T/F Advantages of a lease over a purchase include that the buyer can usually obtain a more expensive vehicle and a lower monthly payment
TRUE
T/F In determining the purchase price of a new car, a trade in vehicle should not be mentioned until the cost of the new car can be settled
TRUE
T/F The largest fixed expense associated with a new automobile is depreciation
TRUE
T/F Lenny the landlord has the right to take legal action against Tina the tenant for non-payment of rent or destruction of property
FALSE
T/F Private mortgage insurance is usually required if the down payment for the home is less than 20%
FALSE
T/F Rental insurance isn't important since the landlord's insurance on the building includes coverage on all tenants' belongings
TRUE
T/F Angela wanted to rent an apartment so her landlord required her to sign a lease, a lease is a legal document that defines the conditions of her rental agreement
TRUE
T/F Your lifestyle affects your housing decision
FALSE
T/F Service contracts on vehicles are usually a wise financial decision
Budget spending
Many people make mistakes when managing current cash needs which of these is not a frequently made mistake?
Checking account
A demand deposit is also known as what?
Loan
A credit card is a type of?
Mortgage company
Which of the following primarily provides loans for home purchases?
Commercial bank
Which of the following offers a full range of financial services including checking, savings, lending and other services?
All
When misused, credit can result in?
Temptation to overspend
Perhaps the greatest disadvantage of using credit is what?
Mortgage loan
Which of the following is an example of close ended credit?
The maximum dollar amount of credit the lender has made available to the borrower
A line of credit is what?
Interest
The periodic charge for the use of credit is called what?
Private label or store brands
These products are sold by one chain of stores and are low cost alternatives to famous name brands?
Warranty
This is a written guarantee from the manufacturer that specifies the conditions under which the product can be returned replaced or repaired?
Have a trained mechanic of your choice check the vehicle
The appearance of a used car can be deceptive, when purchasing a used vehicle, it is a good idea to?
The monthly lease payments are usually lower than monthly finance payments
Which of the following is an advantage of a car lease?
At the end of the lease you have no ownership interest of the vehicle
Which of the following is a disadvantage of a car lease?
Leasee
When you sign your lease, the tenant is that what?
Condo
Which of the following is a form of housing when there is a monthly fee for the upkeep of the common area
All
What should a homebuyer consider when evaluating a house?
PMI payments
Trenton wants to buy a house but can only provide 10% of the down payment, he will probably be required to buy what?
ARM (adjusted rate mortgage)
Ursula wants to have an interest rate that can increase or decrease during the life of her loan, she should look for what kind?
1. Character
2. Capacity
3. Capital
4. Collateral
5. Condition
What are the five C's of credit
A key factor in defining the borrowers willingness to live up to the terms of the loan
Character
The ability of the borrower to service the loan in a timely fashion
Capacity
Something of value that's used to secure a loan and that the lender can claim in case of default
Collateral
The amount of unencumbered assets owned by the borrower used as another indicator of the borrowers ability to repay the loan
Capital
The extent to which prevailing economic conditions could affect the borrowers ability to service a loan
Condition