GEB 3006 EVALUATION EXAM ACTUAL QUESTIONS AND
SOLUTIONS GRADED A+
✔✔canceling an old credit card with no balance due - ✔✔could hurt your credit score
✔✔The treasury yield curve is normally - ✔✔upward sloping, with long term rates being
higher than short term rates.
✔✔Having mortgage debt is generally considered better than - ✔✔having credit card
debt.
✔✔It is legal for an employer to review your credit report as part of - ✔✔the application
process.
✔✔In general, applying for and receiving new credit cards will tend to - ✔✔decrease
your FICO score.
✔✔Assume that your parents have more liabilities than assets as a result of a $100,000
of credit card debt. In the event of their death, the children will - ✔✔NOT inherit the
credit card debt.
✔✔Interest rates on 30 year fixed rate mortgages tend to follow or correlate with: -
✔✔The 10 year treasury note rate
✔✔Interest rates paid by corporations and individual are normally derived from the
current: - ✔✔The treasury yield curve
✔✔At a given interest rate, extending the term of your auto loan from 36 months to 60
months will: - ✔✔Decrease your payment and increase the amount of interest paid over
the loan
✔✔If we experience inflation, the Federal Reserve would likely ________ interest rates.
- ✔✔increase
✔✔Which is NOT a major credit monitoring company? - ✔✔Transpacific
✔✔A flat or inverted yield curve - ✔✔often signals a recession.
✔✔You should never shop for a car based on a budgeted payment, - ✔✔but instead
look at the overall cost of the vehicle.
✔✔Retailers commonly offer new items at significantly higher prices, - ✔✔then plan to
market the goods down later to ultimately achieve the desired gross margin goal.
, ✔✔Which of the following would provide the most objective information about a
product? - ✔✔A food product ingredient label.
✔✔you should always advisable to have your auto financing arranged - ✔✔in advanced
before you start negotiating on a car.
✔✔Depreciation on autos tends to be highest in years - ✔✔1-3
✔✔Generally, you need to plan to stay in a house for about ______ years to reduce the
risk of losing money on the house when you resell it. - ✔✔5
✔✔Real estate commissions are usually - ✔✔6% and paid by the seller.
✔✔Monthly escrow for property taxes and insurance can add up to ____ more to the
mortgage payment. - ✔✔40%
✔✔principal, interest, taxes and insurance. - ✔✔PITI
✔✔The housing expense ratio of PITI divided by gross monthly income should not
exceed a maximum of ____. - ✔✔18% for conventional loans and 19% for FHA loans
✔✔The total debt ratio of (PITI + long term debt obligations) divided by gross monthly
income should not exceed _____. - ✔✔36% for conventional loans and 43% for FHA
loans.
✔✔At what point should the homeowner contact the mortgage company and request
that PMI be stopped? - ✔✔When the homeowner's equity in the house reaches 20%.
✔✔In order to get the lowest interest available, your FICO score should be: - ✔✔760
✔✔square footage = - ✔✔sale price / area under ac unit and heater
✔✔Which of the following would tend to have the highest interest rate at any given time.
- ✔✔Home equity line of credit (HELOC)
✔✔Fixed rate home mortgages should be refinanced when interest rates -
✔✔Decrease.
✔✔Early in the life of a mortgage, - ✔✔most of the payment goes toward interest with
very little being applied to principal.
SOLUTIONS GRADED A+
✔✔canceling an old credit card with no balance due - ✔✔could hurt your credit score
✔✔The treasury yield curve is normally - ✔✔upward sloping, with long term rates being
higher than short term rates.
✔✔Having mortgage debt is generally considered better than - ✔✔having credit card
debt.
✔✔It is legal for an employer to review your credit report as part of - ✔✔the application
process.
✔✔In general, applying for and receiving new credit cards will tend to - ✔✔decrease
your FICO score.
✔✔Assume that your parents have more liabilities than assets as a result of a $100,000
of credit card debt. In the event of their death, the children will - ✔✔NOT inherit the
credit card debt.
✔✔Interest rates on 30 year fixed rate mortgages tend to follow or correlate with: -
✔✔The 10 year treasury note rate
✔✔Interest rates paid by corporations and individual are normally derived from the
current: - ✔✔The treasury yield curve
✔✔At a given interest rate, extending the term of your auto loan from 36 months to 60
months will: - ✔✔Decrease your payment and increase the amount of interest paid over
the loan
✔✔If we experience inflation, the Federal Reserve would likely ________ interest rates.
- ✔✔increase
✔✔Which is NOT a major credit monitoring company? - ✔✔Transpacific
✔✔A flat or inverted yield curve - ✔✔often signals a recession.
✔✔You should never shop for a car based on a budgeted payment, - ✔✔but instead
look at the overall cost of the vehicle.
✔✔Retailers commonly offer new items at significantly higher prices, - ✔✔then plan to
market the goods down later to ultimately achieve the desired gross margin goal.
, ✔✔Which of the following would provide the most objective information about a
product? - ✔✔A food product ingredient label.
✔✔you should always advisable to have your auto financing arranged - ✔✔in advanced
before you start negotiating on a car.
✔✔Depreciation on autos tends to be highest in years - ✔✔1-3
✔✔Generally, you need to plan to stay in a house for about ______ years to reduce the
risk of losing money on the house when you resell it. - ✔✔5
✔✔Real estate commissions are usually - ✔✔6% and paid by the seller.
✔✔Monthly escrow for property taxes and insurance can add up to ____ more to the
mortgage payment. - ✔✔40%
✔✔principal, interest, taxes and insurance. - ✔✔PITI
✔✔The housing expense ratio of PITI divided by gross monthly income should not
exceed a maximum of ____. - ✔✔18% for conventional loans and 19% for FHA loans
✔✔The total debt ratio of (PITI + long term debt obligations) divided by gross monthly
income should not exceed _____. - ✔✔36% for conventional loans and 43% for FHA
loans.
✔✔At what point should the homeowner contact the mortgage company and request
that PMI be stopped? - ✔✔When the homeowner's equity in the house reaches 20%.
✔✔In order to get the lowest interest available, your FICO score should be: - ✔✔760
✔✔square footage = - ✔✔sale price / area under ac unit and heater
✔✔Which of the following would tend to have the highest interest rate at any given time.
- ✔✔Home equity line of credit (HELOC)
✔✔Fixed rate home mortgages should be refinanced when interest rates -
✔✔Decrease.
✔✔Early in the life of a mortgage, - ✔✔most of the payment goes toward interest with
very little being applied to principal.
