M2 Post Review EPF

If you make all of your homeowner's insurance premium payments and a tornado hits your home during a bad thunderstorm, what will you need to do next to repair the damage?

• take out a new insurance policy

• pay the deductible

• file a claim with your insurance company

• prepare to pay for it with your own money because insurance won't pay

Which type of mortgage would be most likely to have the lowest monthly payment?

• 10 year adjustable rate mortgage

• 15 year fixed rate mortgage

• 5 year adjustable rate mortgage

• 30 year fixed rate mortgage

Which of the following is a service provided by banks?

• make car loans

• Make personal schedules

• sell health insurance

• sell groceries

Akia wants to take out a loan to purchase her first car, a used Toyota Corolla. Where would you recommend she go to get the best interest rate and loan terms?

• pawn shop

• credit union

• payday loan store down the street

• car dealership

Brad's parents with a credit score of 750 added him to a credit card they had held for 20 years when he was 15 years old. When Brad turned 21, he wanted to open his own credit card. How did his parents' actions impact his credit score compared to applicants of the same age?

• Brad's credit score was 0 because he had no established credit of his own.

• Brad's credit score was lower because he had held a credit card for 6 years.

• Brad's credit score was lower because his parents had the account for 20 years

• Brad's credit score was higher because he had already held a credit card for 6 years.

What category would your electricity bill that varies each month fit in?

• variable expenses

• fixed expenses

• assets

• debt

Which of the following strategies is the best way to avoid paying extra fees to a bank?

• set up online or phone notifications to let you know when your account balance is low

• allow your bank account balance to dip below the minimum required balance

• use out of network ATMs to withdraw cash

• never worry about your checking balance because you know you have overdraft protection

What is the best reason to avoid using overdraft protection offered by a bank?

• There are high fees associated with the use of overdraft protection.

• Overdraft protection only covers savings accounts.

• Overdraft protection is only needed if you are writing checks.

• Most banks don't offer overdraft protection.

What is the recommended percentage of your monthly income that should be devoted to housing? 

• 20%

• 30%

• 40%

• 50%

The goal of budgeting is to make sure that you are spending money on things that you can afford. If you are spending more money than you earn, what economic situation exists for you?

• deficit

• surplus

• negative credit

• foreclosure