1. Sheldon has a home valued at $108,000 and an outstanding mortgage of $70,000. If his lender is willing to provide a home equity loan of up to 80% of market value, how much could Sheldon borrow using a home equity loan?

   a.	$16,400
   b.	$86,400
   c.	$38,000
   d.	$30,400
   e.	$80,000

10 points

QUESTION 2

1. Businesses provide:

   a.	stores.
   b.	money payments.
   c.	land and capital.
   d.	goods and services.
   e.	labor.

10 points

QUESTION 3

1. It is recommended that you never give your credit card account number over the phone to people or organizations who call you.

   True

   False

10 points

QUESTION 4

1. Credit cards with very low minimum payment requirements are in the consumer's best interest.

   True

   False

10 points

QUESTION 5

1. A family could have a positive savings ratio at the same time its debt service ratio is increasing.

   True

   False

10 points

QUESTION 6

1. A legal claim that allows creditors to liquidate loan collateral is a:

   a.	loan.
   b.	note.
   c.	security claim.
   d.	lien.
   e.	none of these

10 points

QUESTION 7

1. The equity in your home is the difference between the loan balance and the purchase price.

   True

   False

10 points

QUESTION 8

1. Net worth is highest at about what age?

   a.	45
   b.	75
   c.	85
   d.	65
   e.	55

10 points

QUESTION 9

1. _____ arenota type of open account credit.

   a.	Bank credit cards
   b.	Retail charge cards
   c.	30-day charge accounts
   d.	Bank debit cards
   e.	Student credit cards

10 points

QUESTION 10

1. All of the following are key items lenders look at in granting creditexcept:

   a.	credit history.
   b.	religious affiliations.
   c.	stability in employment and housing.
   d.	outstanding debt.
   e.	income.

10 points

QUESTION 11

1. Mary and Tom purchased their home for $150,000, and it is now worth $175,000. Its asset value is $150,000.

   True

   False

10 points

QUESTION 12

1. Anna uses her credit card regularly, but she pays the total balance monthly. Anna should look for a credit account with:

   a.	long grace period.
   b.	no annual fee.
   c.	low interest rates.
   d.	a and b
   e.	a and c

10 points

QUESTION 13

1. The annual percentage rate (APR) on a single-payment loan for $1,000 at a simple interest rate of 12% is:

   a.	24%.
   b.	18%.
   c.	15%.
   d.	12%.
   e.	10%.

10 points

QUESTION 14

1. The liquidity ratio is an indicator of a family's ability to pay current debts if there is an interruption in income.

   True

   False

10 points

QUESTION 15

1. A budget is an orderly estimate of income and expenditures.

   True

   False

10 points

QUESTION 16

1. The add-on method is less expensive than the simple interest method when stated rates of interest are identical.

   True

   False

10 points

QUESTION 17

1. Ideally, retirement planning should begin:

   a.	during the year before retirement.
   b.	when the last child has left home.
   c.	as soon as the mortgage is paid off.
   d.	when you get married.
   e.	none of these

10 points

QUESTION 18

1. One shouldnotuse credit to purchase food, clothing, and other non-durables, even if it is only for convenience and the balance will be totally paid upon billing.

   True

   False

10 points

QUESTION 19

1. Net worth achieves its highest level beginning at age 65 and increases throughout retirement years.

   True

   False

10 points

QUESTION 20

1. The principle of indemnity would prevent:

   a.	a negligent third party from being held liable for damages if the injured party was insured.
   b.	an insured from collecting more than he lost.
   c.	the act of one person from being imputed to another.
   d.	a significant amount of loss control activity.
   e.	an insurer from ever waiving it's right to subrogation.

10 points

QUESTION 21

1. The lender uses a credit application to determine whether the borrower has the _____ to handle the debt.

   a.	credit and character
   b.	character and confidence
   c.	acumen and capacity
   d.	confidence and capacity
   e.	character and capacity

10 points

QUESTION 22

1. The most common forms of open account credit are bank credit cards and retail charge cards.

   True

   False

10 points

QUESTION 23

1. Your average propensity to consume is the percentage of each dollar of income, on average, that is spent for current needs rather than savings.

   True

   False

10 points

QUESTION 24

1. A credit card user's credit rating will be harmed if she pays only the minimum monthly payment on a credit card.

   True

   False

10 points

QUESTION 25

1. Perkins loans are loans dispersed to students by funds given to the school.

   True

   False

10 points

QUESTION 26

1. Auto insurance is needed primarily:

   a.	as a protection against potential liability claims.
   b.	to finance maintenance of auto.
   c.	to satisfy federal requirements.
   d.	as a part of the lender's requirements.
   e.	to counter the effects of increasing fuel prices.

10 points

QUESTION 27

1. Which of the following losses is most likely to be covered under your auto liability insurance?

   a.	A medical bill for your injuries related to an accident that you caused.
   b.	A medical bill for injuries to a passenger in your car arising from an accident in which you were not at fault.
   c.	An auto shop bill for repairs of a car you own due to an accident caused by your negligence.
   d.	An auto repair bill for repairs to the car of a driver who negligently caused an accident with you.
   e.	A legal bill incurred by your insurer defending you from a claim related to an accident caused by your negligence.

10 points

QUESTION 28

1. Currently all new federal loans that are dispersed have a fixed interest rate

   True

   False

10 points

QUESTION 29

1. To determine Expected Family Contribution for an independent student, whose tax information will be used?

   a.	Students only
   b.	Parents only
   c.	Students and parents

10 points

QUESTION 30

1. Each student has a different capacity to borrow student loans.

   True

   False