UGBA 135 FINAL EXAMS LATEST QUESTIONS AND
ANSWERS SURE A+
✔✔Suppose you buy a home for $500,000. You make a $100,000 downpayment and
borrow $400,000 in a 30 year fixed rate mortgage. A year later, you move to another
city for work and decide to sell your home. Real estate prices have appreciated 2%
during that year and you are able to sell your home for $510,000. However, real estate
commissions, taxes and fees cost you 8% of the selling price. For simplicity let's ignore
the small amount of principal you paid on your mortgage during that year. How much of
your downpayment will you get back?
A. All of it plus $10,000
B. About 50%
C. About 70%
D. A little over 90% - ✔✔C. About 70%
✔✔Suppose you are buying a home for $600,000 and making a $100,000 down
payment. You are choosing between a fixed rate 30 year mortgage, a fixed rate 15 year
mortgage, and an adjustable rate 30 year mortgage. Which will have the highest initial
monthly payment?
A. 30 year adjustable rate mortgage
B. 30 year fixed rate mortgage
C. 15 year fixed rate mortgage
D. No answer text provided. - ✔✔C. 15 year fixed rate mortgage
✔✔If you expect to move within the next 5 years does it usually make more financial
sense to buy or rent?
A. Buy
B. Rent - ✔✔B. Rent
✔✔Which is usually NOT true about leasing a car?
, A. At the end of the lease, you don't own anything.
B. You can drive a leased car for as many miles as you like without paying extra.
C. When you turn in your car at the end of the lease, you'll be charged for tears,
scratches, and dents.
D. Leases are complicated contracts and often contain hidden fees. - ✔✔B. You can
drive a leased car for as many miles as you like without paying extra.
✔✔T or F: At the end of a car lease, if you return the car to the leasing company you
cannot be charged for tears, scratches, and dents - ✔✔False
✔✔T or F: Car leases are complicated and often contain hidden fees. - ✔✔True
✔✔T or F: Everyone with a job and a retirement plan should hire a personal financial
advisor. - ✔✔False
✔✔Common ways for financial advisors to be compensated are (choose all correct
answers):
A. Commisions
B. By the hour or a flat fee for specific services.
C. A percentage of the client's gains or losses.
D. An annual percentage of the client's assets under management. - ✔✔A. Commisions
B. By the hour or a flat fee for specific services.
D. An annual percentage of the client's assets under management.
✔✔T or F: Typical annual financial advisor fees when charged as a percentage of
assets under management may exceed what you are earning in a savings account. -
✔✔True
✔✔As discussed in the video "Questions to Ask Financial Advisors," the most important
question to ask a financial advisor is?
A. Did your clients' portfolios outperform the market last year?
B. Do you invest in the same assets that recommend that your clients buy?
C. Are you a fiduciary? - ✔✔C. Are you a fiduciary?
✔✔T or F: Before calling oneself a financial advisor, one has to pass five exams and be
designated by the Federal Government as a "Certified Financial Advisor." - ✔✔False
✔✔Which of the following are the two most common chapters (types) for personal
bankruptcy? (choose two)
A. Chapter 3
ANSWERS SURE A+
✔✔Suppose you buy a home for $500,000. You make a $100,000 downpayment and
borrow $400,000 in a 30 year fixed rate mortgage. A year later, you move to another
city for work and decide to sell your home. Real estate prices have appreciated 2%
during that year and you are able to sell your home for $510,000. However, real estate
commissions, taxes and fees cost you 8% of the selling price. For simplicity let's ignore
the small amount of principal you paid on your mortgage during that year. How much of
your downpayment will you get back?
A. All of it plus $10,000
B. About 50%
C. About 70%
D. A little over 90% - ✔✔C. About 70%
✔✔Suppose you are buying a home for $600,000 and making a $100,000 down
payment. You are choosing between a fixed rate 30 year mortgage, a fixed rate 15 year
mortgage, and an adjustable rate 30 year mortgage. Which will have the highest initial
monthly payment?
A. 30 year adjustable rate mortgage
B. 30 year fixed rate mortgage
C. 15 year fixed rate mortgage
D. No answer text provided. - ✔✔C. 15 year fixed rate mortgage
✔✔If you expect to move within the next 5 years does it usually make more financial
sense to buy or rent?
A. Buy
B. Rent - ✔✔B. Rent
✔✔Which is usually NOT true about leasing a car?
, A. At the end of the lease, you don't own anything.
B. You can drive a leased car for as many miles as you like without paying extra.
C. When you turn in your car at the end of the lease, you'll be charged for tears,
scratches, and dents.
D. Leases are complicated contracts and often contain hidden fees. - ✔✔B. You can
drive a leased car for as many miles as you like without paying extra.
✔✔T or F: At the end of a car lease, if you return the car to the leasing company you
cannot be charged for tears, scratches, and dents - ✔✔False
✔✔T or F: Car leases are complicated and often contain hidden fees. - ✔✔True
✔✔T or F: Everyone with a job and a retirement plan should hire a personal financial
advisor. - ✔✔False
✔✔Common ways for financial advisors to be compensated are (choose all correct
answers):
A. Commisions
B. By the hour or a flat fee for specific services.
C. A percentage of the client's gains or losses.
D. An annual percentage of the client's assets under management. - ✔✔A. Commisions
B. By the hour or a flat fee for specific services.
D. An annual percentage of the client's assets under management.
✔✔T or F: Typical annual financial advisor fees when charged as a percentage of
assets under management may exceed what you are earning in a savings account. -
✔✔True
✔✔As discussed in the video "Questions to Ask Financial Advisors," the most important
question to ask a financial advisor is?
A. Did your clients' portfolios outperform the market last year?
B. Do you invest in the same assets that recommend that your clients buy?
C. Are you a fiduciary? - ✔✔C. Are you a fiduciary?
✔✔T or F: Before calling oneself a financial advisor, one has to pass five exams and be
designated by the Federal Government as a "Certified Financial Advisor." - ✔✔False
✔✔Which of the following are the two most common chapters (types) for personal
bankruptcy? (choose two)
A. Chapter 3
