True and False).

__1. Inflation is a rise in the general level of prices.

__2. In times of inflation, the buying power of the dollar decreases.

__3. In simple terms, interest rates represent the cost of money.

__4. Interest rates can have a major impact on financial planning.

__5. Long-term goals include buying a house.

__6. Liquidity involves the potential for lower earnings.

__7. Many companies have a policy of offering customers seasonal discounts during off-season periods.

__8. Income includes the sum of all salaries, wages and interest received from savings.

__9. When risk is high, the investment is considered aggressive or speculative.

__10. Risk can be managed.

__11. Investment assets are funds set aside for short-run or trading purposes.

__ 12. Trust is not always crucial when selecting a financial advisor.

__ 13. Marketing is customer driven, which means selling whatever the company can make without considering the customers wants and needs.

__14. Consumers are never subjected to deception from the media.

__15. Impulse buying never results in overspending.

__16. Buying a house is a big investment and involves little or no preparation.

___17. A budget is often necessary for people to live within their means and manage spending.

___18. Propaganda appeals often engage the buyer to indulge and spend more.

___19. Seasonal variations offer reductions of the basic list price when the demand has declined because of a change in climatic or holiday conditions.

___20. Situational factors may influence the buyers choice such as the physical surroundings.

___21. When buying a home, financing includes the source of money, costs, terms and conditions.

___22. Renting is a consideration when saving for a down payment.

___ 23. When taking financial risks, the investment is considered conservative when risk is high.

___ 24. Arranging a home inspection is NOT one of the steps in the process of buying a home.

___25. Current interest rates can affect the price of a home.

___26. Many people believe that the location is the most important factor to consider when selecting a home.

___27. Qualifying for a mortgage is similar to obtaining other forms of credit.

___28. Prepaid interest may be part of a mortgage agreement.

___29. Adjustable rate mortgages with a payment cap can result in a situation of negative amortization.

___30. Home improvements may contribute more to the value of the home than the cost of the renovations.

___31. An appraisal is the estimate of the current value of a property.

___32. A mortgage is a long term loan on a specific piece of property such as a home with payments usually made over 15, 20, or 30 years.

___33. Credit encourages overspending and ties up future income.

___34. Creditors determine credit worthiness on the basis of character, capacity, capital, collateral, and conditions.

___35. A Treasury bond maturities range from 10 to 30 years.

___36. A municipal bond is also called a muni.

___37. To determine the quality and risk associated with bond issues, investors rely on the bond rating.

___38. A credit card can sometimes be financially beneficial to the borrower or card user.

___39. Amortization refers to changes in the monthly payment for a variable rate mortgage.

___40. With fixed rates mortgages, the longer the period of the loan then the lower the interest rate.