Fin 008 - Personal Finance and Investments » Winter 2021 » Quiz 3

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Question #1
If you miss payments and default on your mortgage, the lender can do all the following EXCEPT
A.   have you arrested.
B.   sell or lease your home.
C.   foreclose on your property.
D.   take possession of your home.
E.   evict you.
Question #2
Credit cards have all the following benefits EXCEPT
A.   reliance on cash.
B.   universal acceptance.
C.   low transaction costs.
D.   security.
E.   convenience.
Question #3
The costs of operating a car include all the following EXCEPT
A.   fuel.
B.   insurance and registration.
C.   price.
D.   maintenance and repair.
E.   property taxes.
Question #4
Buyers should use a home inspection checklist when buying a home.
A.   TRUE
B.   FALSE
Question #5
When you identify the product you want to buy, you should first identify
A.   your opportunity cost.
B.   the availability of the product.
C.   what attributes are most important.
D.   the cheapest alternative.
E.   what need the product will satisfy.
Question #6
With an ARM (adjustable rate mortgage), if interest rates change,
A.   a rate cap is applied.
B.   you risk negative amortization.
C.   a payment cap is applied.
D.   the amount of your payment stays the same.
E.   the amount of your payment changes.
Question #7
If you get into trouble with debt you should first
A.   sell an asset or borrow to pay off the loan.
B.   refinance the loan.
C.   file for bankruptcy.
D.   inform lenders and get debt counseling.
E.   let lenders repossess your financed asset.
Question #8
An alternative to a promise of "satisfaction guaranteed" on a product is
A.   caveat emptor.
B.   consumer protection.
C.   small claims court.
D.   a class-action suit.
E.   a warranty.
Question #9
After understanding what you need in a home, the next step is to determine how much house you can afford.
A.   FALSE
B.   TRUE
Question #10
Diversifying your savings in a series of instruments with different maturities is a strategy known as
A.   direct deposit.
B.   time deposit.
C.   reinvesting.
D.   laddering.
E.   segregated savings.

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