1.

Based upon acquiring equity or wealth, purchasing a car is to purchasing a home as leasing a car is to

	a.	improving a house.
	b.	repairing a house.
	c.	buying a condominium.
	d.	joining a cooperative.
	e.	renting an apartment.

2.

Which of the following statements is true?

	a.	Due to payment risk, the interest rates at the beginning of a fixed rate mortgage and adjustable rate mortgage of the same term are the same.
	b.	The monthly payment on a 15 year fixed rate mortgage equals exactly two times the monthly payment on a 30 year fixed rate mortgage with the same interest rate.
	c.	Both of the above statements are true.
	d.	Neither of the above statements are true.

3.

Private Mortgage Insurance (PMI) is used to

	a.	maintain monthly mortgage payments if the consumer becomes ill.
	b.	reimburse the original purchase value of the house to the bank if the borrower defaults.
	c.	insure the borrower against damage to the home.
	d.	insure the bank to receive at least 20% of the original purchase value of the house if the borrower defaults.
	e.	insure the bank against the loss of housing value relative to the mortgage.

4. I am offered by banks (or, more precisely, depository institutions). I promise to pay interest from a fixed beginning date to a fixed maturity date. Customer withdrawal before maturity results in a penalty. Who am I?

	a.	a Savings Deposit
	b.	a Certificate of Deposit
	c.	a Money Market Mutual Fund
	d.	a Money Market Deposit Account
	e.	a Checking Account