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If you?re considering purchasing a new home, the mortgage

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Question;1. If you?re considering purchasing a;new home, the mortgage;lender will probably require a down payment. The amount will;be based on the lender?s required;A. loan-to-value ratio. C. home listing value.;B. credit investigation. D. market conditions.;2. Another requirement of lenders in;considering mortgage loans;is the borrower?s ability to repay the loan. In this regard, lenders;often calculate an affordability ratio that?s;A. total debt payments, including the proposed loan, to;net income.;B. total monthly payments on all debt to gross income, plus;mortgage payments.;C. net income to total mortgage interest.;D. monthly mortgage payments to monthly gross income.;3. Variable auto ownership costs are;most dependent on;A. 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 very rapidly by pooling funds;and offering check type transaction services are;A. 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 your bank 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.? A bank service that would be useful is;A. 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 to meet obligations is called;A. 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 account;B. Checking account D. Certificate of deposit;9. If you went to an institution that;specialized in real estate mortgage loans to request a first mortgage loan for;your new house, you would probably be at a;A. commercial bank. C. savings and loan.;B. real estate broker. D. brokerage company.;10. You?ve decided to start a regular;savings program. While the best amount of liquid savings for anyone depends on;that person?s unique circumstances, a rule of thumb would be to have enough;savings for;A. 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. You?ve opened a savings account in;the amount of $10,000 with a nominal or offered interest rate of 5% and;quarterly compounding. You leave your money in the account for exactly one;year, ending at the end of the quarter. Approximately how much money is in your;account, including interest?;A. $10,500 C. $10,525;B. $10,509 D. $10,552;12. You have a regular savings plan in which you?ve set aside $1,000 in a money;market account 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. $1,061.68;B. $1,060.00 D. $1,072.00;13. If you calculated the interest rate that you actually earned in 11 and 12;above, you would have calculated what rate?;A. Nominal C. Offered;B. Traditional D. Effective;14. One of your concerns when you;consider opening deposit accounts is the safety of your money. Fortunately;many financial institutions are insured by the Federal Deposit Insurance Corporation;(FDIC). However, the FDIC limits the amount of insurance for a single depositor;to the amount of;A. $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 economic factors isn?t known but must be estimated. That factor is;A. 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 likely;A. 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 lease is;A. 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 bathrooms;B. The ability to deduct interest expense on your tax return;C. The ages of your children;D. The use of a real estate broker;19. When buying a home, you want to;make sure your ownership can?t be disputed later on. One way for your;settlement attorney to help ensure this is to arrange for a;A. settlement binder. C. release form the listing broker.;B. closing statement. D. title check.;20. You?re looking for a first mortgage loan with the lowest possible interest;rate and may have to 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

 

Paper#48653 | Written in 18-Jul-2015

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