EPF-Major Purchases

Shrek is driving his beloved swamp-mobile when he gets into an accident. Which part of his car insurance policy pays for damages to his swamp-mobile?

• Collision

• Uninsured motorist

• Comprehensive

• Overall vehicle

Leasing a carriage might be a good option for Prince Charming if he

• always wants to drive a newer car

• drives a lot of miles every year

• wants to own the car at the end of the term

• wants to customize their car

Renting would be better than buying for Shrek if he

• does not want to need to pay for maintenance and upkeep expenses

• plans on staying at his home for at least 20 years.

• wants to own several large dogs and a few cats.

• wants to paint the walls bright colors

In the movie Shrek, if Shrek wants to rent a cottage in the swamp from Lord Farquaad, what formal legal contract would he need to sign as a renter?

•  

  lease

• application

• renter's insurance policy

• evaluation matrix

When Shrek is buying a new swamp house, a home inspection

• should be done by a licensed building inspector.

• is done after the home is purchased.

• should only be done for properties with sale prices of $500,000 or more.

• all of these

Shrek is considering buying a new swamp with an Adjustable Rate Mortgage (ARM). With this type of loan, the interest rate Shrek pays over the life of the loan will

• increase or decrease as the prime rate changes

• always be lower than a fixed rate mortgage

• not change for the life of the loan

• change every 5 years in predictable patterns

Most renters and all homeowners in Shrek's swamp will both need to pay monthly for

• electricity

• washing machine payments

• a new furnace

• their mortgage payment

When Shrek wants to buy a new swamp and needs a mortgage, which of these is required?

• Homeowner's insurance

• A cosigner

• A listing of all possessions to be kept inside the home

• all of these

After Shrek has paid for the necessities of food, clothing, and shelter in his swamp, the funds that are left over are called

• Discretionary funds

• Mandatory Funds

• Expenditure funds

• Savings

Donkey borrowed money to purchase a vehicle without making a down payment and now he owes more on the vehicle than it is worth. This situation is referred to as:

• depreciation

• being upside-down on the loan

• leasing

• a hidden cost