FP 101 Week 5 Quiz

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FP 101 Week 5 Quiz
Complete the Week 5 Quiz provided by your facilitator.
Submit your Week 5 Quiz as a Microsoft® Word®attachment to the Assignment Files tab.
Week 5
1.  Before taking out a loan, you should ask yourself whether you can meet all your essential expenses and still afford the monthly loan payments. This can be determined by
a.   Adding up basic monthly expenses then subtracting this total from gross pay
b.   Asking what you plan to give up to make the monthly loan payment
c.   Multiplying your take-home pay by 50% and subtracting your current loan payments
d.   Adding up basic monthly expenses, subtracting this total from take-home pay and, if needed, figuring out what to give up to make the payment
 
2.  The text identifies several phases in the buying process. The correct order of the phases is
a.   Evaluating alternatives, pre-shopping activities, selection and purchase, post-purchase activities
b.   Pre-shopping activities, selection and purchase, evaluating alternatives, post-purchase activities
c.   Pre-shopping activities, evaluating alternatives, selection and purchase, post-purchase activities
d.   Evaluating alternatives, selection and purchase, pre-shopping activities, post-purchase activities
 
3.  Information gathering is part of the ________________ phase of the decision-making process.
a.   Evaluating alternatives
b.   Pre-shopping activities
c.   Selection and purchase
d.   Ordering activities
 
4.  The dealer’s cost is also known as
a. Invoice price
b. Sticker price
c. Set price
d.Capitalized cost
 
5.  A potential problem with having a long car loan is
a.   Low monthly payments
b.   Low-interest loan
c.   Negative equity
d.   Loan preapproval
 
6.  All of the following are fixed operating costs for a vehicle except
a.   Insurance
b.   Interest on an auto loan
c.   License and registration
d.   Maintenance and repairs
 
7.  Which of the following is NOT correct?
a.   Renting is usually less expensive in the short run.
b.   Home ownership usually has long-term financial advantages.
c.   Lifestyle and financial factors should be analyzed to determine if you should rent or buy.
d.   Traditional financial guidelines suggest that your home should cost about five times your annual income.
 
8.  Which of the following is a disadvantage of renting?
a.   Renters have fewer responsibilities than home owners.
b.   Tenants cannot take tax deductions for mortgage interest and property tax.
c.   Renters usually do not have to be concerned with maintenance and repairs.
d.   Taking possession of a rental unit is less expensive than buying a home.
 
9.  What should a home buyer consider when evaluating a house?
a.   Zoning laws
b.   School system
c.   Property values of the community
d.   All of these should be evaluated.
 
10. Trenton wants to buy a house but can provide only a 10% down payment. He probably will be required to have
a.   Amortization
b.   Escrow
c.   Points
d.   Private mortgage insurance
 
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