Mortgages and Investing

What does "ARM" stand for in the context of mortgages?

• Adjustable Rate Mortgage

• Annual Rate Mortgage

• Average Rate Mortgage

• Advanced Rate Mortgage

What is the process called when the bank collects all payments and uses the funds to pay your insurance and taxes?

• Amortization

• Refinancing

• Escrow

• Foreclosure

If your house is worth $300,000 and you owe the bank $250,000, what is your home equity?

• $50,000

• $250,000

• $300,000

• $550,000

How can having several 'short term' loans affect your decision to choose a loan with a higher interest rate?

• It allows you to roll them into the mortgage

• It prevents you from buying a house

• It increases your overall debt

• It decreases your credit score

What happens if a business goes bankrupt and you own its stocks?

• You receive dividends

• You lose your investment

• You gain more shares

• You get a refund

What should you consider before investing in stock markets?

• Stock investment is always safe

• You can only invest through banks

• Stock investment is tricky and you could lose your investment

• You need to invest in all stock markets

Which market indicator measures the daily performance of nearly all stocks on its market to indicate market health?

• Dow Jones

• S&P 500

• NASDAQ

• Nikkei 225

What is the Rule of 72 used for?

• Estimating the time it takes for an investment to double

• Calculating the exact future value of an investment

• Determining the risk level of an investment

• Predicting stock market trends

What type of return do stocks typically provide?

• Interest

• Dividend

• Guaranteed return

• No return

What additional benefit do stocks provide to investors?

• Preferential treatment when bond matures

• Voting rights in the company

• Guaranteed interest

• No additional benefits