finance chapter 8 and 9

The first phase in the buying process involves information gathering TRUE
An implied warranty is usually in written form false
Service contracts are usually included in the cost of appliances and other high-priced items. FALSE
Mediation involves a legally binding decision by a third party to solve a consumer complaint. FALSE
Representation by a lawyer is usually required in small claims court. FALSE
A class action suit allows many people with the same complaint to take action as a group. true
Unit pricing uses a standard unit of measurement to compare prices of packages of different sizes. true
A limited warranty covers all aspects of the product and does not require the buyer to incur any of the costs for shipping and repairs. false
Impulse buying refers to: unplanned purchasing
The items produced for a single retail chain are commonly sold under a ____________ brand. store
Howard Ramsell recently became aware of implied warranties that exist for consumer purchases. An implied warranty exists as a result of: the intended use of a product.
The process of resolving consumer complaints with the use of a third party whose recommendations are non-binding is called: mediation
____________ is the settlement of a difference by a third party whose decision is legally binding. arbitration
The purpose of small claims court is to: resolve minor consumer complaints.
Small claims courts: are located in every state.
A vehicle sold “as is” has: no express warranty.
Which of the following is usually the largest fixed expense for a new vehicle? depreciation
Damian Walker just purchased a new vehicle. He is reading his owner’s manual to know when he needs to take it in for its regular servicing at the dealer. He wants to make sure this car lasts a while. What step in the purchasing process is Damian carrying out? post purchase activities
Which of the following would be an advantage of leasing a vehicle? lease payments are likely to be lower than loan payments
The price that is paid for a vehicle in a lease is called the: capitalized cost.
Emily is trying to decide whether to lease or buy a car. Which one of the following is not a factor necessary in making the comparison? gasoline costs
Most people select a place of residence based on available financial resources, needs, and lifestyle. true
ease of mobility is an advantage of renting true
Negotiating a purchase price for a home usually involves an offer and counteroffers. true
The amount of the down payment will affect the amount of the monthly mortgage needed to purchase a home. true
An escrow account is designed to reduce the cost of a mortgage. false
Renting is more advantageous than buying a home when you are seeking: lower short-term living costs.
A cost associated with home buying would be: property taxes.
Kate plans to rent instead of buying her housing. Which advantage of renting will she realize? lower initial costs
Earnest money is used: as evidence of good faith by a homebuyer
Which of the following would increase the speed of equity growth for a homebuyer? obtaining a 15-year mortgage instead of a 30-year mortgage
What is prepaid interest charged by a mortgage company called? points
Todd Foley is applying for a $100,000 mortgage. He can select either a $600 monthly payment with no points or a $520 payment with two points. How many months will it take Todd to cover the cost of the discount points if he takes the lower monthly payment? 25— Number of months = (.02 x $100,000)/($600 – 520) = 25 months (Change as shown.)
Which one of these situations creates negative amortization? paying less than the monthly interest on a mortgage
A short-term mortgage with a very large final payment is called a ____________ mortgage. balloon
Refinancing of a mortgage is recommended when: interest rates fall
The purpose of an appraisal is to: estimate the current value of a home
Jennifer Garland is purchasing a home that was assembled in a factory and then moved to the living site. What type of housing is Jennifer purchasing? prefabricated home
The assessed value of your home is the: value used to calculate property taxes.
The appraised value of your home is the: estimated current market value.
A loan based on the equity of the home that provides the homeowner with tax-free income and which is paid back when the home is sold is called a(an): reverse mortgage.
Ted pays $4,500 in real estate property taxes and is in the 28 percent tax bracket. What is the value of this federal tax deduction? $1,260— Tax deduction value = $4,500(.28) = $1,260
Some real estate experts estimate that remodeling a kitchen can add 130 percent of the cost of remodeling to the value of the house. A remodeled kitchen costing $8,000 could add _____ to the value of the house. $10,400—$8,000(1.3) = $10,400
A contract condition that states that the agreement is binding only if a certain event occurs is a(n): contingency clause.

Leave a Reply

Your email address will not be published. Required fields are marked *