El Camino College Finance Quiz 1 2014 Rooks

1. Usury is: a. an interest payment in excess of the legally permitted rate. b. a form of personal property. c. a person who has a financial trust. d. an interest in real estate or real property.

2. A fiduciary is: a. a person who is a lawyer. b. a person who is a lender. c. a person who has a financial trust. d. none of the above.

3. A bond is a(n) a. tax lien. b. ownership document. c. form of usury. d. debt instrument.

4. The highest legal form of property ownership is: a. freehold estate. b. fee simple estate. c. leasehold estate. d. none of the above.

5. A payment of principal at the end of a series of smaller periodic mortgage payments that is typically much higher than the previous payments is called a(n): a. final payment b. balloon payment c. escalated payment d. tiered payment

6. An underwriter: a. makes loans based on assessment of risk. b. makes loans based on assessment of net worth. c. denies loans based on FICO scores. d. none of the above.

7. Often in times of war, a decree of the state will issue: a. wildcat loans. b. fiat money. c. pledge stocks. d. fiat bonds.

1 8. Prime rate refers to: a. the most popular rate. b. the best rate available with points purchased. c. the bank’s lowest rate. d. the bank’s highest rate.

9. The Truth in Lending Law requires: a. borrowers to be honest in their dealings. b. each lender to form a federal open market committee. c. lenders to give borrowers the lowest interest rate. d. lenders to inform borrowers of the total costs of obtaining a loan.

10. Personal property that is included with real estate is called: a. pawn. b. chattel. c. legacy. d. all of the above.

1. a (p. 5) 2. c (p. 3) 3. d (p. 8) 4. b (p. 7) 5. b (p. 13) 6. a (p. 6) 7. b (p. 8) 8. c (p. 17) 9. d (p. 18) 10. b (p. 5)