AFIP- INSTALLMENT SALES EXAM QUESTIONS AND
ANSWERS WITH COMPLETE SOLUTIONS VERIFIED
GRADED A++
Regulation Z implements the provisions of the Fair Credit Practices Act.
False
In cases where the customer has the option to purchase credit insurance, while
the amount of premium can be included in the deal and financed, the cost of the
coverage does not impact the APR calculation if the insurance is properly
disclosed in the contract
True
The Annual Percentage Rate is the actuarial method for determining the cost of
credit.
True
If permitted by state law, a newspaper advertisement for vehicle installment
financing may post the interest add-on rate instead of the APR
False
If a vehicle advertisement mentions the APR, it must also list the following: the
amount or percentage of the down payment, the number of payments or period of
payments, the amount of any payment, the name of the institution granting the
credit and the amount of the finance charge.
, False
If an advertisement is found to violate the provisions of Regulation Z, the
offending party may be forced to discontinue the advertisement through the
provisions imposed by a Cease and Desist order issued by the Federal Trade
Commision and may be subject to fine of $11,000 per violation.
True
Disclosure records must be maintained for a period of five (5) years.
False
If a customer inquires as to what the rate of interest will be, the verbal response
from the F&I practitioner must always state the interest as APR. In the case of
transactions where the interest is applied to an unpaid balance, a simple annual
interest rate may also be stated.
True
In the course of computing the deal, it is determined that the customer owes
more on the vehicle to be traded in than has been allowed as a trade-in value. It is
permissible to record the negative amount as a negative down payment amount
on the installment contract.
False
When a creditor permits the consumer to consummate a close-end transaction
online, the consumer must be required to access the disclosures before
becoming obligated. A link to the disclosures satisfies the timing rule if the
consumer cannot bypass the disclosures before becoming obligated.
True
ANSWERS WITH COMPLETE SOLUTIONS VERIFIED
GRADED A++
Regulation Z implements the provisions of the Fair Credit Practices Act.
False
In cases where the customer has the option to purchase credit insurance, while
the amount of premium can be included in the deal and financed, the cost of the
coverage does not impact the APR calculation if the insurance is properly
disclosed in the contract
True
The Annual Percentage Rate is the actuarial method for determining the cost of
credit.
True
If permitted by state law, a newspaper advertisement for vehicle installment
financing may post the interest add-on rate instead of the APR
False
If a vehicle advertisement mentions the APR, it must also list the following: the
amount or percentage of the down payment, the number of payments or period of
payments, the amount of any payment, the name of the institution granting the
credit and the amount of the finance charge.
, False
If an advertisement is found to violate the provisions of Regulation Z, the
offending party may be forced to discontinue the advertisement through the
provisions imposed by a Cease and Desist order issued by the Federal Trade
Commision and may be subject to fine of $11,000 per violation.
True
Disclosure records must be maintained for a period of five (5) years.
False
If a customer inquires as to what the rate of interest will be, the verbal response
from the F&I practitioner must always state the interest as APR. In the case of
transactions where the interest is applied to an unpaid balance, a simple annual
interest rate may also be stated.
True
In the course of computing the deal, it is determined that the customer owes
more on the vehicle to be traded in than has been allowed as a trade-in value. It is
permissible to record the negative amount as a negative down payment amount
on the installment contract.
False
When a creditor permits the consumer to consummate a close-end transaction
online, the consumer must be required to access the disclosures before
becoming obligated. A link to the disclosures satisfies the timing rule if the
consumer cannot bypass the disclosures before becoming obligated.
True
