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FP 120 Week 5 Individual Assignment Week 5 Quiz

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FP 120 Week 5 Individual Assignment Week 5 Quiz
Complete the Week 5 Quiz located under Assessments on your student website. You may complete the exam only once. Your instructor will receive a separate copy of your quiz results in your Individual forum
Essentials of Personal Finance
Week Five Quiz
Please answer the following multiple choice questions. When done please post to your appropriate assignments account. You have until the end of this class week (Monday mid-night Arizona time to complete this quiz and have it posted for grading). Good luck to all of you I am sure you will all do a great job on this.
1.    When buying a new car, which of the following will give you an edge in negotiating the price?
a.    The make of the old car you are trading in
b.    Opting to lease instead of buy
c.    Getting pre-approved for a loan from your bank or credit union first
d.    Signing up for scheduled maintenance
2.    What is a smart way to decrease your monthly car insurance bill?
a.    Buy a new car every three years
b.    Switch insurance companies every year
c.    Opt for a higher deductible
d.    Take out a car loan for five years instead of three
3.      Over what period of time is it is okay to finance a car?
a.    three years
b.    four years
c.    five years
d.    six years
4.    A brand-new car depreciates by what percentage of its purchase price as soon as you drive it off the lot?
a.    5%
b.    10%
c.    15%
d.    20–30%
5.     If you cannot afford the payments to purchase the new car you want, what should you consider doing?
a.    leasing it
b.    buying it used 
c.    putting down more money
d.    taking out a longer-term loan
6.    What’s the most important thing to know when buying a home?
a.    You’re getting a great price.
b.    You’re able to make a 20& down payment.
c.    You’re able to afford the mortgage payment.
d.    Your job is secure and you can afford the mortgage, the property taxes, the insurance, and the maintenance costs
7.     Before buying a home, how can you be sure you can afford it?
a.    If your mortgage payment is the same as your rent payment you should be just fine.
b.    You should play “house” for six months.
c.    If the bank gives you a mortgage for the amount you are asking, you’re okay—they’ve wouldn’t have given it to you if you couldn’t afford it.
d.    Make sure your mortgage payment never increases.
8.    If you put down less than 20% on a home purchase, which of the following will you need to pay for?
a.    The moving costs of the current tenants
b.    Private mortgage insurance
c.    20% over the closing costs to your realtor
d.    Privatizing your utilities
9.     According to Suze, what should you be sure to have in place before buying a home?
a.    A 10% down payment, an emergency fund, and an adjustable rate mortgage
b.    A 20% down payment, an emergency fund, and a 15- or 30-year, fixed-rate mortgage, and a secure job
c.    A 20% down payment
d.    3% down
10.   What’s the best advice when buying a home?
a.    Buy the biggest home you can afford.
b.    Buy the smallest home that meets your needs.
c.    Buy a house that has been completely renovated so you don’t have to spend any more money.
d.    Buy your dream home now because you may never get another chance.
11.   Buying a home can be smart if you are planning to keep it for at least how long?
a.    One year
b.    Two years
c.    Four years
d.    Five years or longer 
12.  What is the average amount of closing costs in the U.S. today?
a.    $1,000
b.    $3,700
c.    $7,000
d.    $8,500
13.  A Tenantsin Common (TIC) title designates what kind of home ownership?
a.    One primary homeowner, in a home that has been passed down to him or her
b.    Various members owning specified amounts or interests in the house
c.    Community property that is owned by the state
d.     A single family that is living in a home that has been foreclosed upon.
14.  Given today’s low interest rates, what is the best long-term mortgage?
a.    An adjustable-rate mortgage
b.    A fixed-rate mortgage
c.    A negative amortization mortgage
d.    A no-money-down mortgage
15.   How do interest rates on a 15-year, fixed-rate mortgage compare to those on a 30-year, fixed-rate mortgage?
a.    Usually they’re more to compensate for the shorter term of the loan.
b.    Usually they’re the same—the term of the loan has no effect on the interest rate
c.    Usually they’re about a half of a percent less.
d.    It depends on the credit score of the person applying.
16.  If you own a home with your spouse in joint tenancy with right of survivorship and one of you dies, what happens to that person’s half of the house?
a.    The house will pass to whomever that person left it to in his or her will.
b.    The house will have to go through a procedure known as probate.
c.    The house will automatically pass to the surviving spouse. 
d.    The house will be sold and the proceeds will go to the surviving spouse.
17.  What is a short sale on a home?
a.    The seller agrees to sell the home to a private party for less money so both parties incur fewer tax penalties.
b.    A sale on a home that has been vacant for over six months and has been foreclosed upon.
c.    A sale in which the seller can skip paying any closing costs because there is no time in escrow—the home goes directly to the seller the next day.
d.    The lender accepts whatever you can sell your house for in today’s market, even if that is less than the outstanding balance on your mortgage.
18.  Under what circumstances does it make sense to refinance your home?
a.    If your new mortgage interest rates are 2.5% below what you are currently paying
b.    If your new mortgage interest rates are 1% below what you are currently paying
c.    If you will be living in the house long enough to recoup the closing costs from the money you’re saving from the lower mortgage payment and you did not extend the loan term.
d.    It always makes sense to refinance as long as you can save money.
19.  When does it make sense to have paid off the mortgage on your home?
a.    Never—as long as interest rates are low, it doesn’t make sense.
b.    By the time you retire if you are planning to live in your home forever 
c.    If the interest rate you are paying on the home is more than the return you are getting on your investments
d.    Never—you don’t want to give up the only tax write off you may have
20.   When do you get the most benefit from the mortgage interest credit on your income tax?
a.    During the later years of the mortgage
b.    During the early years of the mortgage
c.    Over the entire term of the mortgage as long as the payments are fixed
d.    Never—the government has abolished the mortgage interest deduction.

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