Finance Test 2

Which of the following usually offers money market funds? An investment company
Which of the following primarily provides loans for home purchases? A mortgage company
In general, which fees have recently changed for checking accounts? Overdraft fees.Stop-payment orders.Check printing
Anders went to Norway and went shopping. He had to sign his name once when he purchased this document and a second time at the store. Anders used a Traveler’s check.
A joint account with Sara and John allows John and Sara to both write checks on the account.
Given the information here, what should Jason’s adjusted bank balance for his bank reconciliation be?Bank Balance $300Outstanding Checks $129Deposit in Transit $50ATM Fees $26Interest Earned $5Checkbook Balance $242 $221
Claudette’s grandchildren are 7 and 9 years old. When Claudette passed away, her grandchildren inherited her money. However, the will stipulated that they should not get control of the money until age 25. Which of the following should be set up to provide for the management and control of the funds? A Trust
Gwen had three accounts as listed here. In 2011, how much was her total coverage by the FDIC? $550,000
T/F The debt-to-equity ratio is calculated by dividing your total liabilities, including your mortgage, by your net worth. FALSE
A credit file can include your spouse’s name and Social Security number. TRUE
A cash advance Accrues interest charges beginning the day the cash advance is made.
The Equal Credit Opportunity Act (ECOA) prohibits a lender from discriminating based on Race, Nationality, Age, Sex
FICO scores generally range from 350-850
Information about a personal bankruptcy may be reported in your credit file for 10 years.
The Fair Credit Reporting Act, enacted in 1971, places limits on who can obtain your credit report. TRUE
Credit reports can be obtained for all of the following reasons except Inquiry by a neighbor.
Joe bought some cheese at his local grocery store After he brought it home, he noticed it was moldy even though the expiration was still three weeks away. H should call the toll-free hotline number printed on the package to tell the company about the problem he encountered. TRUE
Most products come with some guarantee of quality. Which of the following is usually in written form, created by the seller or manufacturer, and has two forms? Express warranty
Which of the following is correct about the lemon law? It applies to vehicles that have been serviced four times to correct the same problem in the first12,000 miles.
A service contract Covers the repair costs of a product.
Which of the following is not a legal option for upper-income consumers? A legal aid society
Using the following information, what is the cost to buy a car?Down Payment $3,000Monthly Loan Payment $350 per month for six yearsOpportunity Cost of down payment $3,000 x loan period (in years) x 2% interestEstimated value of vehicle at end of ownership period $4,000 $24,560
Using the following information, what is the cost to lease a car? $18,530
T/F A service contract is frequently called an extended warranty even though service contracts are not warranties. TRUE
Problem identification is part of the ____ phase of the decision-making process. preshopping activities
Mike bought a new car. His new car warranty probably included all of the following except Extended coverage for air conditioning.
T/F The purpose of an escrow account is to pay the points at closing. FALSE
T/F Home improvements will definitely increase the selling price of a house. FALSE
Which of the following is NOT correct? Traditional financial guidelines suggest that your home should cost about five times your annual income
Which of the following is a disadvantage of renting? Tenants cannot take tax deductions for mortgage interest and property taxes.
Which of the following is an advantage of renting? Renters have fewer responsibilities than home owners.
Given the information here, what is the annual cost of owning?Home value $300,000Annual Mortgage Payments $19,200Annual Property Taxes $4,800Annual Homeowner Insurance $1,200Estimated Maintenance and Repairs 1% of home valueGrowth in Equity $3,000Tax Savings (mortgange interest and property tax) $2,800Estimate annual appreciation 1.5% of home value $17,900
Jordan earns an annual salary of $45,000. If a lender uses 33% of monthly gross income as a guideline for the maximum PITI (principal, interest, taxes, and insurance), what is the maximum mortgage that Jordan can apply for? $1,237.50

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