GEB 3006 FINAL EXAM ACTUAL QUESTIONS AND
SOLUTIONS GRADED A+
✔✔Borrowing on your 401-K plan is generally considered a good financial move. -
✔✔False
✔✔You should always shop for a car loan before seeing the dealer, since the loan rates
offered by dealers can be manipulated against the profit on the car and the value of the
trade-in. - ✔✔True
✔✔Assume you are using student loans to pay for college. What is the maximum
recommended level of debt you should incur in order to be conservative and ensure that
you can afford the debt payments after graduation? - ✔✔No more than half of your
anticipated starting salary.
✔✔Debit cards have fewer protections if lost compared to credit cards, but credit cards
can result in significant financial difficulties for individuals who misuse the card and incur
credit card debt. - ✔✔True
✔✔Assume you are borrowing $10,000 per year to cover all costs of attending UCF. If it
takes you 5 years to graduate instead of 4, then the cost of attending UCF is: -
✔✔50,000
✔✔Which of the following is NOT a major credit monitoring company? - ✔✔Transpacific
✔✔Who sets monetary policy in the United States? - ✔✔The Federal Reserve
✔✔A flat or inverted yield curve often signals a recession. - ✔✔True
✔✔It is generally a good idea to co-sign a loan for another individual in the event they
do not qualify for a loan. - ✔✔False
✔✔Consumers are allowed by law to receive a free copy of their credit report twice a
year from each of the three credit reporting agencies. - ✔✔False
✔✔Most experts recommend that consumers "freeze" their credit files as a result of
recent data leaks at Equifax. - ✔✔True
✔✔You should never shop for a car based on a budgeted payment, but instead look at
the overall cost of the vehicle. - ✔✔True
✔✔One of the best investments you can make is paying down high interest rate credit
card debt. Essentially you are receiving a high after tax return risk free. - ✔✔True
, ✔✔Incurring significant amounts of student debt will impact your future borrowing power
for a home or car loan. - ✔✔True
✔✔What are the dual mandates established by Congress for the Federal Reserve? -
✔✔Control inflation and maximize employment
✔✔When banks advertise the interest rate on their savings accounts, they must show: -
✔✔APY
✔✔If the annual interest rate is 12%, the monthly periodic rate would be: - ✔✔1%
✔✔Assume you paid $300,000 for a house that is now worth $400,000. A bank will
make you a loan of 90% based on current value. You owe $200,000 on your first
mortgage.How much can you borrow on a second mortgage or home equity loan? -
✔✔$160000
✔✔If you buy a larger size of a product, the price per unit (such as price per ounce) will
always be lower. - ✔✔False
✔✔The price per unit of items bought in a warehouse club such as Sams or Costco will
always be lower than a regular retail store. - ✔✔False
✔✔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. -
✔✔True
✔✔Which of the following would provide the most objective information about a
product? - ✔✔A food product ingredient label.
✔✔In most cases, service warranty contracts provide excellent protection and are
generally good deals. - ✔✔False
✔✔Assume you spent $250 for a pressure washer that will save you $50 a year in
rental costs. Using simple payback, how long will it take to get your money back? -
✔✔5yrs
✔✔It is never a good idea to prepay something for a discount due to the risk involved. -
✔✔False
✔✔When shopping for a car, you should immediately offer your current car as a trade-in
to strengthen your bargaining power. - ✔✔False
SOLUTIONS GRADED A+
✔✔Borrowing on your 401-K plan is generally considered a good financial move. -
✔✔False
✔✔You should always shop for a car loan before seeing the dealer, since the loan rates
offered by dealers can be manipulated against the profit on the car and the value of the
trade-in. - ✔✔True
✔✔Assume you are using student loans to pay for college. What is the maximum
recommended level of debt you should incur in order to be conservative and ensure that
you can afford the debt payments after graduation? - ✔✔No more than half of your
anticipated starting salary.
✔✔Debit cards have fewer protections if lost compared to credit cards, but credit cards
can result in significant financial difficulties for individuals who misuse the card and incur
credit card debt. - ✔✔True
✔✔Assume you are borrowing $10,000 per year to cover all costs of attending UCF. If it
takes you 5 years to graduate instead of 4, then the cost of attending UCF is: -
✔✔50,000
✔✔Which of the following is NOT a major credit monitoring company? - ✔✔Transpacific
✔✔Who sets monetary policy in the United States? - ✔✔The Federal Reserve
✔✔A flat or inverted yield curve often signals a recession. - ✔✔True
✔✔It is generally a good idea to co-sign a loan for another individual in the event they
do not qualify for a loan. - ✔✔False
✔✔Consumers are allowed by law to receive a free copy of their credit report twice a
year from each of the three credit reporting agencies. - ✔✔False
✔✔Most experts recommend that consumers "freeze" their credit files as a result of
recent data leaks at Equifax. - ✔✔True
✔✔You should never shop for a car based on a budgeted payment, but instead look at
the overall cost of the vehicle. - ✔✔True
✔✔One of the best investments you can make is paying down high interest rate credit
card debt. Essentially you are receiving a high after tax return risk free. - ✔✔True
, ✔✔Incurring significant amounts of student debt will impact your future borrowing power
for a home or car loan. - ✔✔True
✔✔What are the dual mandates established by Congress for the Federal Reserve? -
✔✔Control inflation and maximize employment
✔✔When banks advertise the interest rate on their savings accounts, they must show: -
✔✔APY
✔✔If the annual interest rate is 12%, the monthly periodic rate would be: - ✔✔1%
✔✔Assume you paid $300,000 for a house that is now worth $400,000. A bank will
make you a loan of 90% based on current value. You owe $200,000 on your first
mortgage.How much can you borrow on a second mortgage or home equity loan? -
✔✔$160000
✔✔If you buy a larger size of a product, the price per unit (such as price per ounce) will
always be lower. - ✔✔False
✔✔The price per unit of items bought in a warehouse club such as Sams or Costco will
always be lower than a regular retail store. - ✔✔False
✔✔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. -
✔✔True
✔✔Which of the following would provide the most objective information about a
product? - ✔✔A food product ingredient label.
✔✔In most cases, service warranty contracts provide excellent protection and are
generally good deals. - ✔✔False
✔✔Assume you spent $250 for a pressure washer that will save you $50 a year in
rental costs. Using simple payback, how long will it take to get your money back? -
✔✔5yrs
✔✔It is never a good idea to prepay something for a discount due to the risk involved. -
✔✔False
✔✔When shopping for a car, you should immediately offer your current car as a trade-in
to strengthen your bargaining power. - ✔✔False
