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Home arrow Student Resources arrow Study Guide arrow Chapter 9: Personal Loans arrow Chapter 9 True/False Quiz

Chapter 9 True/False Quiz



 This activity contains 13 questions.

Question 1
1 Before obtaining a personal loan, you should recognize the possible sources of financing and the various loan characteristics.
   
 
End of Question 1


Question 2
2 A payday loan is a short-term, low-interest loan designed for people who need funds in advance of receiving their paychecks.
   
 
End of Question 2


Question 3
3 Commercial banks are the primary lenders to individuals who need mortgage loans when purchasing homes.
   
 
End of Question 3


Question 4
4 Lenders are required to specify a standardized loan rate with directly comparable interest expenses to loans from different lenders over the life of the loan.
   
 
End of Question 4


Question 5
5 Some borrowers are only able to obtain a personal loan if someone with a more established credit history cosigns the loan.
   
 
End of Question 5


Question 6
6 Simple interest is the interest computed as a percentage of the existing loan amount (or principal).
   
 
End of Question 6


Question 7
7 The size of the monthly payment is independent of the number of payments to be made on the loan.
   
 
End of Question 7


Question 8
8 With the add-on interest method, the amount of the monthly payment is determined by calculating the interest that must be paid on the loan amount and dividing the total interest by the number of payments.
   
 
End of Question 8


Question 9
9 A home equity loan allows homeowners to borrow against the equity in their home.
   
 
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Question 10
10 College students should never finance the purchase of a car.
   
 
End of Question 10


Question 11
11 Any car dealer who negotiates will purposely price a car well above the price at which he is willing to sell the car.
   
 
End of Question 11


Question 12
12 A disadvantage of leasing is that you need a substantial down payment.
   
 
End of Question 12


Question 13
13 When a loan is used to purchase a specific asset, that asset is commonly used as collateral.
   
 
End of Question 13





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