Morgans monthly income is 10000 of which she brings home 700

Morgan’s monthly income is $10,000, of which she brings home $7,000 after all taxes and deductions. According to the common rule-of-thumb used by lenders, what is the maximum amount Morgan’s consumer debt payments should not exceed?

$1,050

$1,500

$1,960

$3,600

Which of the following are appropriate investments for Logan’s emergency fund assets?

              I         Checking account

            II         Money market accounts

           III         Short-term certificates of deposit

           IV         U.S. Treasury bills

I and III only

II and IV only

II and III only

I, II, III, and IV

Chase, age 26, is just beginning his career as a computer analysts after completing graduate school. He is engaged and planning to purchase a home soon after marrying his college sweetheart. His life stage is somewhat typical for someone in the _____ life stage.

1

2

3

4

Banks will typically grant home equity loans or lines of credit up to what loan-to-value percentage?

20 percent

40 percent

60 percent

80 percent

Robert and Jennifer are looking to refinance their $400,000 mortgage. Which of the following mortgages will allow them to pay the smallest monthly payment this year if they all charge a 5% interest rate?

30-year standard mortgage

30-year biweekly mortgage

30-year balloon mortgage

30-year adjustable rate mortgage

All the following are advantages of budgeting, EXCEPT:

It helps reveal inefficient uses of resources.

It fosters creativity and judicious risk-taking.

It provides a way of measuring progress toward goals.

It heightens awareness of and attention to the need to set financial goals.

Destiny’s monthly income is $15,000, of which she brings home $12,000 after all taxes and deductions. According to the common rule-of-thumb used by lenders, what is the maximum amount of Destiny’s monthly payments that should not be exceeded on all debts?

$3,000

$3,360

$4,320

$5,400

Which of the following is NOT accurate specific to a cosigner?

Because Mike is a cosigner on a loan for his brother Fabio, Mike has agreed to accept responsibility for repayment of the debt.

As a recent college graduate, it is likely that Megan will need a cosigner on her first loan.

Dan has agreed to cosign on an auto loan for his girlfriend Amber. If Amber stops making payments on the car after a bad breakup, Dan will not be held responsible since he is not directly related to Amber.

Even though Shannon is a cosigner on her younger sister’s loan, she will not directly benefit directly from the loan.

Which of the following statements concerning cash flow planning is correct?

The goal is to maximize net cash flow.

The goal should be to invest for the future, rather than maintaining current lifestyle.

The goal should be to identify strengths and weaknesses in the client’s cash flows.

The goal is to optimize net cash flow.

		$1,050
		$1,500
		$1,960
		$3,600 Which of the following are appropriate investments for Logan’s emergency fund assets?               I         Checking account             II         Money market accounts            III         Short-term certificates of deposit            IV         U.S. Treasury bills I and III only II and IV only II and III only I, II, III, and IV Chase, age 26, is just beginning his career as a computer analysts after completing graduate school. He is engaged and planning to purchase a home soon after marrying his college sweetheart. His life stage is somewhat typical for someone in the _____ life stage. 1 2 3 4 Banks will typically grant home equity loans or lines of credit up to what loan-to-value percentage? 20 percent 40 percent 60 percent 80 percent Robert and Jennifer are looking to refinance their $400,000 mortgage. Which of the following mortgages will allow them to pay the smallest monthly payment this year if they all charge a 5% interest rate? 30-year standard mortgage 30-year biweekly mortgage 30-year balloon mortgage 30-year adjustable rate mortgage All the following are advantages of budgeting, EXCEPT: It helps reveal inefficient uses of resources. It fosters creativity and judicious risk-taking. It provides a way of measuring progress toward goals. It heightens awareness of and attention to the need to set financial goals. Destiny’s monthly income is $15,000, of which she brings home $12,000 after all taxes and deductions. According to the common rule-of-thumb used by lenders, what is the maximum amount of Destiny’s monthly payments that should not be exceeded on all debts? $3,000 $3,360 $4,320 $5,400 Which of the following is NOT accurate specific to a cosigner? Because Mike is a cosigner on a loan for his brother Fabio, Mike has agreed to accept responsibility for repayment of the debt. As a recent college graduate, it is likely that Megan will need a cosigner on her first loan. Dan has agreed to cosign on an auto loan for his girlfriend Amber. If Amber stops making payments on the car after a bad breakup, Dan will not be held responsible since he is not directly related to Amber. Even though Shannon is a cosigner on her younger sister’s loan, she will not directly benefit directly from the loan. Which of the following statements concerning cash flow planning is correct? The goal is to maximize net cash flow. The goal should be to invest for the future, rather than maintaining current lifestyle. The goal should be to identify strengths and weaknesses in the client’s cash flows. The goal is to optimize net cash flow.

Solution

Using the 28/36 rule, Morgan may spend upto 36% of her income as consumer debt payments. This gives us a maximum payment of $3,600 as her monthly debt payments. ($10,000*36% = $3,600).

That implies Option (iv) would be the correct choice.

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