Chapter 7 using consumer loans

các câu hỏi trắc nghiệm môn kế hoách tài chính, financial planing, đầy đủ, điểm cao, ôn thi cho final và các bài thi học phần, đại học Hà Nội, FMT, ngành tài chính ngân hàng, The majority of loans made by savings and loan associations are loans.

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Chapter 7 Using Consumer Loans

Principles of Finance (Trường Đại học Ngoại thương)

Chapter 7 Using Consumer Loans

Principles of Finance (Trường Đại học Ngoại thương)

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1 Even if you do have money, you may still be better off using an installment loan for a big-ticket purchase.

United States - AK - DISC: TVM

2 Consumer loans, like open account credit, result from a rather informal process

KEYWORDS: Bloom's: Understanding

3 Loans against a life insurance policy do not have to be paid back

KEYWORDS: Bloom's: Remembering

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4 The most common use of consumer loans is to purchase automobiles.

5 From a financial planning perspective when considering a consumer loan, you should ask yourself how the purchase fits into long-term financial plans

KEYWORDS: Bloom's: Analyzing

6 When you take out a loan against the cash value of your life insurance policy, you're really borrowing from yourself

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7 Collateral is an item of value used to secure the principal portion of a loan

8 The cash value of a life insurance policy can be used as a source of loan collateral

9 Consolidation loans are used to purchase new furniture and appliances when many items are needed at the same time

United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills

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STATE STANDA

RDS:

United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets and Interest Rates

10 Consolidation loans are often used to help borrowers straighten out a critical financial situation

11 Borrowing to pay for a college education is a legitimate use of credit

12 College costs have been escalating faster than the overall rate of inflation

NATIONAL STA United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills

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13 College costs have been escalating, but not as rapidly as the overall rate of inflation

14 The student loans with the lowest rates of interest and the best loan terms are the PLUS loans

KEYWORDS: Bloom's: Creating

15 The student loans with the best loan terms are the Stafford and Perkins loans

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KEYWORDS: Bloom's: Creating

16 PLUS loans are made to parents or legal guardians rather than to the student

17 Student loans are made by banks and other financial institutions, but students apply for these loans through their universities

18 In order to continue receiving student loans, the student must be making satisfactory progress in his academic program

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19 529 Plans are the newest type of student loans

20 Student loans are not dischargeable in Chapter 13 bankruptcy proceedings

21 Earnings on 529 college savings plans can be tax free when used for qualifying college education expenses

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22 Student loans are dischargeable in Chapter 7 bankruptcy proceedings

23 Single-payment loans are often used as a form of interim financing

24 Installment loans are typically repaid in one payment

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25 Installment loans are typically repaid in monthly payments

26 The repayment period on most installment loans is six to twelve months

27 The majority of consumer loans are set up with fixed interest rates

a True

b Fals

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28 When the market interest rate goes up, the rate on variable-rate loans goes up

29 Variable-rate loans are desirable if interest rates are expected to fall in the future

30 The lender can adjust the rate on variable-rate loans only on prespecified adjustment dates

a True

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31 Commercial banks are generally more selective in granting loans than finance companies

32 Credit unions dominate the consumer loan market

33 Savings and loan associations dominate the consumer loan market

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34 Consumer finance companies usually charge lower rates of interest than commercial banks

35 Most loans made by consumer finance companies are for larger amounts and are made to low-risk borrowers

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36 Credit unions grant loans only to members of the credit union.

37 Credit unions offer some of the most attractive loan terms available

38 The primary type of loan made by a savings and loan association is the long-term installment loan used for the purchase of a home

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39 S&L associations are not allowed to make loans for things like cars, televisions, and appliances.

40 Sales finance companies commonly purchase the retail installment contracts of businesses that sell big-ticket items such as automobiles, furniture, and appliances

41 GMAC is an example of a captive finance company

STATE STANDA United States - KS - DISC: Financial Markets and Inte - DISC: Financial

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RDS: Markets and Interest Rates

KEYWORDS: Bloom's: Applying

42 Cash value loans are available from all types of life insurance policies

43 The interest rate on a loan against your life insurance policy is set at the time the policy is taken out

44 Life insurance loans could involve a tax penalty if certain conditions are not met

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STATE STANDA

RDS:

45 Because no written contract is usually required, borrowing from friends and relatives is advisable

KEYWORDS: Bloom's: Evaluating

46 When loaning money to a friend or family member, it is advisable to lend only the amount that you can afford to give away

47 When comparing two installment loans with the same principal and APR, the loan with the longer maturity will have the lower monthly payment and the higher total costs

LEARNING OB PFIN.BILL.17.7-3 - LO: 7-3

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48 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

49 It is becoming increasingly frequent for longer-term installment loans to carry variable interest rates

50 Generally speaking, variable-rate loans are desirable to the consumer if interest rates are expected to increase over the course of the loan

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51 Given the choice, it is almost always better to accept a rebate rather than 0 percent APR on an auto loan

52 If a loan has a prepayment penalty, there will be an additional cost to repay the loan early

53 A chattel mortgage is a legal claim that gives lenders the right to liquidate specific personal property to satisfy their claims in the event of default

a True

b Fals

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54 When simple interest is used, the stated rate of interest on single payment loans is equal to the annual percentage rate (APR)

55 With the discount method, the finance charges are calculated and then added to the amount borrowed

56 Simple interest on an installment loan is calculated as Amount of Loan × Interest Rate × Term of Loan

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57 The add-on method is less expensive than the simple interest method when stated rates of interest are identical

58 If the add-on method is used to calculate a finance charge of $150.80 on a $2,200 loan, the amount to be repaid is

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59 If the add-on method is used to calculate a finance charge of $100.80 on a $1,800 loan, the amount to be repaid is

60 If the discount method is used to calculate a finance charge of $250.60 on a $2,400 loan, the amount to be disbursed tothe borrower is $2,400

61 If the discount method is used to calculate a finance charge of $250.60 on a $2,400 loan, the amount to be repaid is

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STATE STANDA

RDS:

62 The most accurate method currently available for calculating the annual percentage rate (APR) on an add-on loan is the Rule of 78

63 If a 12-month installment loan is prepaid at the end of 6 months, one-half of the interest would be saved

64 The purchase of credit life insurance is highly recommended by most financial planning experts

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65 The average annual cost of a college education at a state school is about $33,000

66 About one in three student borrowers have a past due balance

67 Long-term financial goals often depend on borrowing funds The type of loan that generally does not fulfill the term goal achievement is loans

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KEYWORDS: Bloom's: Evaluating

68 A characteristic of consumer loans is that they

a include a negotiated contract

b are arrived at through a formal process

c include a repayment schedule

d are used to purchase big-ticket durable goods and other

69 A consumer loan probably would not be used to

a purchase an auto

b pay for college tuition

c consolidate several loans into

one

d finance a special vacation

e buy back-to-school clothes

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70 The most popular use of consumer loans is to

71 Consumers whose debt burden has become very heavy might apply for a(n)

KEYWORDS: Bloom's: Applying

72 To qualify for a Stafford loan, you must

a demonstrate financial need

b have a good credit rating

c make satisfactory academic

progress

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d all of the above

73 To qualify for a Perkins loan, you must

a demonstrate financial need

b visit the financial

institution

c apply through your parents

d all of the above

74 Regarding student loans, which of the following is not true?

a They are available for both undergraduate and graduate students

b Applications can be filled out on the Internet

c There is no limit on how much can be borrowed with each loan

d There is no limit on the number of loans one can have

e Interest may be tax deductible

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STATE STANDA

RDS:

75 Regarding student loans, which of the following is true?

a They are available only for undergraduate students

b Parents (or legal guardians) must cosign

c There is a limit on how much can be borrowed wirh each loan

d There is a limit on the number of loans one can have

e Interest does not have to be repaid

76 loans do not have to be repaid until after you graduate from college

a Stafford and Perkins

b Stafford and PLUS

c Perkins and PLUS

77 If your installment loan has a variable interest rate,

a the rate will remain the same over the life of the loan

b the amount you borrowed will change with interest rates

c you cannot accurately predict the total interest you will pay on the

loan

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d you can calculate the total interest you will pay on the loan.

e none of these are true

78 Commercial banks generally charge lower interest rates than other lending institutions because

a they make shorter-term loans

b they usually take only the best credit risks

c depositors require lower rates

d they get their funds in the open credit

79 A is often a source of low-rate automobile financing on specific models of vehicles

a savings and loan

association

b credit union

c commercial bank

d consumer finance company

e captive finance company

NATIONAL STA United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills

Tiêu đề	Chapter 7 Using Consumer Loans
Trường học	Trường Đại học Ngoại thương
Chuyên ngành	Finance
Thể loại	Chương

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