ALLIED FIN202 MODULE 4 CHECK YOUR UNDERSTANDING

Question Points
1. Which of
the following is an example of a closing cost?
a. Home inspection
fees
b. Realtor fees
c. Earnest money
d. Title insurance
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2. Small
claims courts:
a. hear only
class-action suits.
b. are located in
every state.
c. have no minimum
dollar limit on claims.
d. require the use
of an attorney.
3. A
short-term mortgage with a very large final payment is called a ___________
mortgage.
a. balloon
b. graduated-payment
c. growing-equity
d.
shared-appreciation
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4. An
implied warranty that comes with a used car is that:
a. major repairs are
the responsibility of the seller.
b. government
agencies will repair safety defects.
c. the vehicle is in
operating condition.
d. hidden defects
will be repaired at no cost to the buyer.
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5. The most
commonly considered factor when selecting a home is the:
a. size of the home.
b. condition of the
home.
c. location of the
home.
d. local zoning
laws.
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6. Pam
McNally is planning to use the services of the Better Business Bureau. A major
purpose of the BBB is to:
a. recommend
reputable companies in an area.
b. resolve consumer
complaints.
c. lobby for
improved consumer protection laws.
d. evaluate products
and services for quality.
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7. For a
class action suit to be valid, it must:
a. involve several
people with the same problem.
b. involve a
national retail store.
c. be a case that
would not be handled by an attorney.
d. involve
low-income individuals.
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8. Which of
the following statements about the Legal Aid Society is not true?
a. It provides legal
assistance to people who cannot afford their own attorney.
b. It is part of a
network of community law offices.
c. It provides legal
assistance at minimal cost or without charge.
d. It is a
for-profit organization.
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9. Renting
would be most appropriate for people who:
a. want to reduce
their taxes.
b. have difficulty
establishing credit.
c. have limited
funds currently available.
d. enjoy remodeling
their residence.
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10. The first
phase of the consumer buying process is:
a. gathering
information.
b. evaluating
alternatives.
c. identifying the
problem.
d. researching
alternatives.
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11. What type
of warranty indicates that the seller has the right to sell a product?
a. Express warranty
b. Implied warranty
c. Warranty of title
d. Warranty of
merchantability
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12. A newly
married couple is having trouble affording a home. What type of mortgage
arrangement would reduce the monthly payment as a result of an interest rate
subsidy from a builder or real estate developer?
a. FHA-insured loan
b. Balloon mortgage
c. Buy-down
d.
Shared-appreciation mortgage
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13. A home
equity loan may also be referred to as a _____________ mortgage.
a.
shared-appreciation
b. graduated-payment
c. growing-equity
d. second
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14. A vehicle
sold “as is” has:
a. a limited
warranty.
b. no express
warranty.
c. a 30-day
guarantee.
d. a full warranty
on parts, but not labor.
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15. The
purpose of a service contract is to:
a. prevent legal
action due to a defective product.
b. protect a product
owner from expensive repairs.
c. reduce the chance
of needing repairs.
d. obtain regular
maintenance on a product.
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16. Recently,
Jim Dahl was on a bus tour in a mountainous area. The bus broke down forcing
the group to stay overnight. Group members had to pay for their own hotel
bills. Jim believes that the hotel cost for the group should be paid by the
tour company. Which legal action would be most appropriate?
a. Small claims
court
b. Mediation
c. Legal aid society
d. Class action suit
17. The
purpose of a security deposit is to:
a. pay for potential
damages.
b. cover the costs
of utilities.
c. pay for the
tenant’s portion of real estate property taxes.
d. cover increases
in monthly rent.
18. The
purpose of title insurance is to:
a. transfer
ownership of property.
b. reduce the chance
of a decrease in property value.
c. protect an owner
from unknown claims on the property.
d. protect an owner
from changes in mortgage interest rates.
19. An example
of an economic buying influence would be:
a. family size.
b. inflation.
c. advertising.
d. hobbies.
20. Which of
the following is an example of a conventional mortgage?
a. An FHA mortgage
b. A buy-down
c. A fixed-rate
mortgage
d. A
shared-appreciation mortgage