cons exam 2 Questions With Complete Solutions
■ Cancelling your life insurance Correct Answer retain
■ Purchasing disability insurance Correct Answer transfer
A borrower with an excellent credit history would be most likely
to receive credit with
lower interest rates.
both higher credit limits and lower interest rates.
variable interest rates.
higher credit limits Correct Answer both higher credit limits
and lower interest rates.
A credit applicant is required by federal regulations to disclose
all of his or her sources of income. Correct Answer false
A group health care plan is sold collectively to an entire group
of persons rather than individuals. Correct Answer true
A preferred provider organization is a group of health care
providers who contract with a health insurance company to
provide services at a discount. Correct Answer true
A student who has lost group health care coverage under his or
her parent's employer group plan due to the parent leaving the
job is eligible to continue coverage through COBRA rights.
Correct Answer true
,An installment purchase agreement provides more protection to
the buyer than a conditional sales contract. Correct Answer true
An insurance application must be approved by the insurance
company before any legally binding insurance contract is
formed. Correct Answer flase
Assume you own a dinning table that was purchased new five
years ago for $2,800, would cost $1000 today, and that it was
expected to last fifteen years when purchased. Similar used
dinning table sell for about $900. What is its actual cash value?
Correct Answer ACV=P - [CA * (P/LE)] ACV= Actual cash
value P= Purchase price
CA= Current age
LE= Life expectancy
ACV=2,800 - [5*(2,800/15)] = 2,800 - 933.33 = $1,866.67
Assume you own a refrigerator that was purchased new seven
years ago for $700, would cost $1300 today, and that it was
expected to last ten years when purchased. Similar used
refrigerators sell for about $300. What is its actual cash value?
Correct Answer ACV=P - [CA * (P/LE)] ACV= Actual cash
value P= Purchase price
CA= Current age
LE= Life expectancy
ACV=700 - [7*(700/10)] = 700 - 490 = $210
Assume you own a refrigerator that was purchased new seven
years ago for $900, would cost $1200 today, and that it was
expected to last ten years when purchased. Similar used
, refrigerators sell for about $300. What is its actual cash value?
Correct Answer $270
Assume you own a TV that was purchased new six years ago for
$1,800, would cost $800 today, and that it was expected to last
ten years when purchased. Similar used TV sell for about $500.
What is its actual cash value? Correct Answer ACV=P - [CA *
(P/LE)] ACV= Actual cash value P= Purchase price
CA= Current age
LE= Life expectancy
ACV=1,800 - [6*(1,800/10)] = 1,800 - 1,080 = $720
Bob and Judy are married couples. What is the most proper joint
ownership of their house? Correct Answer Tenancy by entirety
Bob has $4,000 in credit card debt with 21% APR. He has two
options to pay off the debt. Option 1 is making $300 at the
beginning of each month. Option 2 is making $450 per month.
He needs your help to figure out which option is better and how
much interest he can save by choosing the better option. Correct
Answer Option 1: PV= 4,000 Begin mode I= 21/12
PMT= -300
Option 2: PV= 4,000 I= 21/12
PMT= -450 N=? 9.7
N=? 15
Option 1 Total payment: $300 *15 =$4,500
Option 2 total payment: $450*9.7=$4,365 $4,500 - $4,365=
$135
Bob has $5,000 in credit card debt with 18% APR. He has two
options to pay off the debt. Option 1 is making $250 at the
■ Cancelling your life insurance Correct Answer retain
■ Purchasing disability insurance Correct Answer transfer
A borrower with an excellent credit history would be most likely
to receive credit with
lower interest rates.
both higher credit limits and lower interest rates.
variable interest rates.
higher credit limits Correct Answer both higher credit limits
and lower interest rates.
A credit applicant is required by federal regulations to disclose
all of his or her sources of income. Correct Answer false
A group health care plan is sold collectively to an entire group
of persons rather than individuals. Correct Answer true
A preferred provider organization is a group of health care
providers who contract with a health insurance company to
provide services at a discount. Correct Answer true
A student who has lost group health care coverage under his or
her parent's employer group plan due to the parent leaving the
job is eligible to continue coverage through COBRA rights.
Correct Answer true
,An installment purchase agreement provides more protection to
the buyer than a conditional sales contract. Correct Answer true
An insurance application must be approved by the insurance
company before any legally binding insurance contract is
formed. Correct Answer flase
Assume you own a dinning table that was purchased new five
years ago for $2,800, would cost $1000 today, and that it was
expected to last fifteen years when purchased. Similar used
dinning table sell for about $900. What is its actual cash value?
Correct Answer ACV=P - [CA * (P/LE)] ACV= Actual cash
value P= Purchase price
CA= Current age
LE= Life expectancy
ACV=2,800 - [5*(2,800/15)] = 2,800 - 933.33 = $1,866.67
Assume you own a refrigerator that was purchased new seven
years ago for $700, would cost $1300 today, and that it was
expected to last ten years when purchased. Similar used
refrigerators sell for about $300. What is its actual cash value?
Correct Answer ACV=P - [CA * (P/LE)] ACV= Actual cash
value P= Purchase price
CA= Current age
LE= Life expectancy
ACV=700 - [7*(700/10)] = 700 - 490 = $210
Assume you own a refrigerator that was purchased new seven
years ago for $900, would cost $1200 today, and that it was
expected to last ten years when purchased. Similar used
, refrigerators sell for about $300. What is its actual cash value?
Correct Answer $270
Assume you own a TV that was purchased new six years ago for
$1,800, would cost $800 today, and that it was expected to last
ten years when purchased. Similar used TV sell for about $500.
What is its actual cash value? Correct Answer ACV=P - [CA *
(P/LE)] ACV= Actual cash value P= Purchase price
CA= Current age
LE= Life expectancy
ACV=1,800 - [6*(1,800/10)] = 1,800 - 1,080 = $720
Bob and Judy are married couples. What is the most proper joint
ownership of their house? Correct Answer Tenancy by entirety
Bob has $4,000 in credit card debt with 21% APR. He has two
options to pay off the debt. Option 1 is making $300 at the
beginning of each month. Option 2 is making $450 per month.
He needs your help to figure out which option is better and how
much interest he can save by choosing the better option. Correct
Answer Option 1: PV= 4,000 Begin mode I= 21/12
PMT= -300
Option 2: PV= 4,000 I= 21/12
PMT= -450 N=? 9.7
N=? 15
Option 1 Total payment: $300 *15 =$4,500
Option 2 total payment: $450*9.7=$4,365 $4,500 - $4,365=
$135
Bob has $5,000 in credit card debt with 18% APR. He has two
options to pay off the debt. Option 1 is making $250 at the
