Personal Finance Ch. 7 & 8

purchase a car The most popular use of consumer loans is to
lien A legal claim that allows creditors to liquidate loan collateral is a
False True or False: In most cases, lenders will liquidate the collateral until the loan is paid
True True or False: Commercial banks are generally more selective in granting loans than finance companies
consumer finance companies The highest interest rate installment loans are usually made by
the cost of borrowing is greater than the interest earned on the savings Sometimes it may be better to use savings rather than borrow to make a purchase. This would be recommended when
Savings A 529 college plan is a _____________ plan
False True or False: When comparing two installment loans with the same principal and APR, the loan with the shorter maturity will have the lower monthly payment and the lower total costs
$225,000 Bob Shockey borrowed $25,000 from his $250,000 cast value life insurance policy to send his daughter to private college. Assuming he pays interest as in accrues, if Bob dies before the debt is repaid his beneficiary will receive
Put the agreement in writing Which of the following are recommended if you loan money to a friend or relative?
True True or False: Avoiding texting while driving is an example of risk reduction.
a combined investment plan and insurance policy Universal life insurance is
needs The most accurate way to determine how much life insurance you need is to use the _____________ approach
to transfer risks of serious losses From the standpoint of the person buying insurance, the central purpose of the insurance should be
True True of False: Guaranteed renewable term issuance allows you to renew the policy for another term without qualifying medically
Economic Insurance is a tool that can lessen ______________ risk.
Term life Rodney and Toni are a young couple with two small children. They are doing well financially but their life insurance needs are high and their budget is tight. What type of life insurance will give them the most protection for their money?
All of these The needs approach to determining the amount of life insurance considers
Limited pay _________________ is not a type of term insurance.
income The basic assumptions that the company used to compute its life insurance premiums include all but

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