7. The item that receives the most weight in the BEACON credit scoring system is a) the amount of credit used each month. b) credit payment history. c) credit use. d) the total amount of credit. 8. You can use a grace period to your advantage by making: (Select the best answer below.) a) purchases earlier in the billing cycle, giving you a longer period of free credit. b) cash withdrawals during your grace period. c) purchases later in the billing cycle, giving you a shorter period of free credit. d) the minimum monthly payment. 9. Lenders require Canada Mortgage and Housing Corporation insurance on high ratio mortgages. What is the primary purpose of this insurance? a) Life insurance for the borrowers to make sure they can pay off the house if one of them dies b) Disability insurance for the borrowers to make sure they can pay off the house if one of them can no longer work e) Insurance for the borrower in the event of foreclosure to compensate them for the full price they paid for the home d) Insurance for the lender to protect their collateral in case the borrower defaults and the home has declined in value 10. The amortization period is the a) expected number of years it will take you to pay off the entire mortgage loan balance. b) period of time over which the mortgage interest rate and other conditions will not change. c) period of time over which the mortgage interest rate is subject to negotiation. dj expected number of years it will take you to pay off the interest balance. 1 1, Which definition is most often used by employer sponsored long-term disability insurance? a) own occupation. bj regular occupation () any occupation d) every occupation 12. In comparing term insurance with mortgage life insurance, which of the following is true? a) The premiums decrease with mortgage insurance but not with term insurance. b) Mortgage insurance is less expensive because of the group discount. c) The owner has more control with term insurance. d) Mortgage insurance is guaranteed renewable. 13. The budget method for determining the amount of life insurance needed is based on a) your investments and cash flow. b) your debt history. c) you current situation and your company pension. d) your current situation and expected future needs. FACET125 - Introduction to Finance FINAL EXAM Page 3 of 14