GEB 3006 Final Exam Questions with
Complete Verified Answers 2025-2026
Updated.
If you buy a larger size of a product, the price per unit (such as price per ounce) will always be
lower. - Answer False
The price per unit of items bought in a warehouse club such as Sams or Costco will always be
lower than a regular retail store. - Answer False
Retailers commonly offer new items at significantly higher prices, then plan to market the goods
down later to ultimately achieve the desired gross margin goal. - Answer True
Which of the following would provide the most objective information about a product? -
Answer A food product ingredient label.
In most cases, service warranty contracts provide excellent protection and are generally good
deals. - Answer False
Assume you spent $250 for a pressure washer that will save you $50 a year in rental costs.
Using simple payback, how long will it take to get your money back? - Answer 5 Years
It is never a good idea to prepay something for a discount due to the risk involved. - Answer
False
When shopping for a car, you should immediately offer your current car as a trade-in to
strengthen your bargaining power - Answer False
Zero percent financing is always a great deal since a zero percent interest rate is lower than any
bank would ever offer. - Answer False
Is is always advisable to have your auto financing arranged in advanced before you start
negotiating on a car. - Answer True
Assume that a dealer has offered you $10,000 for your car as a trade-in which will save you 7%
sales tax on your new car's tax value.
If you decide to sell the car to a third party, you need to get more than - Answer $10,700
, Assume you drive 10,000 miles per year and get 20 miles to the gallon.
If your car requires premium gas, how much more will this cost you over a 5 year period
assuming that premium gas costs $0.60/gallon more than regular? - Answer $1,500
Depreciation on autos tends to be highest in years - Answer 1 to 3
Leasing cars is generally much cheaper than buying cars since the payment is so much lower. -
Answer False
Generally, you need to plan to stay in a house for about ______ years to reduce the risk of losing
money on the house when you resell it. - Answer 5 Years
What are some of the disadvantages of owning a house? - Answer All of the above are
disadvantages of owning a house.
Which of the following statements is TRUE? - Answer Real estate commissions are usually 6%
and paid by the seller.
Monthly escrow for property taxes and insurance can add up to ____ more to the mortgage
payment. - Answer 40%
PITI stands for principal, interest, taxes and insurance. - Answer True
The housing expense ratio of PITI divided by gross monthly income should not exceed a
maximum of ____ - Answer 28% for conventional loans and 29% for FHA loans
The total debt ratio of (PITI + long term debt obligations) divided by gross monthly income
should not exceed _____. - Answer 36% for conventional loans and 43% for FHA loans.
Before shopping for a house, buyers should get _______ for their mortgage. - Answer
Preapproved
Assume a homeowner is paying Private Mortgage Insurance (PMI).
At what point should the homeowner contact the mortgage company and request that PMI be
stopped? - Answer When the homeowner's equity in the house reaches 20%.
In order to get the lowest interest available, your FICO score should be: - Answer 760 and
above
Complete Verified Answers 2025-2026
Updated.
If you buy a larger size of a product, the price per unit (such as price per ounce) will always be
lower. - Answer False
The price per unit of items bought in a warehouse club such as Sams or Costco will always be
lower than a regular retail store. - Answer False
Retailers commonly offer new items at significantly higher prices, then plan to market the goods
down later to ultimately achieve the desired gross margin goal. - Answer True
Which of the following would provide the most objective information about a product? -
Answer A food product ingredient label.
In most cases, service warranty contracts provide excellent protection and are generally good
deals. - Answer False
Assume you spent $250 for a pressure washer that will save you $50 a year in rental costs.
Using simple payback, how long will it take to get your money back? - Answer 5 Years
It is never a good idea to prepay something for a discount due to the risk involved. - Answer
False
When shopping for a car, you should immediately offer your current car as a trade-in to
strengthen your bargaining power - Answer False
Zero percent financing is always a great deal since a zero percent interest rate is lower than any
bank would ever offer. - Answer False
Is is always advisable to have your auto financing arranged in advanced before you start
negotiating on a car. - Answer True
Assume that a dealer has offered you $10,000 for your car as a trade-in which will save you 7%
sales tax on your new car's tax value.
If you decide to sell the car to a third party, you need to get more than - Answer $10,700
, Assume you drive 10,000 miles per year and get 20 miles to the gallon.
If your car requires premium gas, how much more will this cost you over a 5 year period
assuming that premium gas costs $0.60/gallon more than regular? - Answer $1,500
Depreciation on autos tends to be highest in years - Answer 1 to 3
Leasing cars is generally much cheaper than buying cars since the payment is so much lower. -
Answer False
Generally, you need to plan to stay in a house for about ______ years to reduce the risk of losing
money on the house when you resell it. - Answer 5 Years
What are some of the disadvantages of owning a house? - Answer All of the above are
disadvantages of owning a house.
Which of the following statements is TRUE? - Answer Real estate commissions are usually 6%
and paid by the seller.
Monthly escrow for property taxes and insurance can add up to ____ more to the mortgage
payment. - Answer 40%
PITI stands for principal, interest, taxes and insurance. - Answer True
The housing expense ratio of PITI divided by gross monthly income should not exceed a
maximum of ____ - Answer 28% for conventional loans and 29% for FHA loans
The total debt ratio of (PITI + long term debt obligations) divided by gross monthly income
should not exceed _____. - Answer 36% for conventional loans and 43% for FHA loans.
Before shopping for a house, buyers should get _______ for their mortgage. - Answer
Preapproved
Assume a homeowner is paying Private Mortgage Insurance (PMI).
At what point should the homeowner contact the mortgage company and request that PMI be
stopped? - Answer When the homeowner's equity in the house reaches 20%.
In order to get the lowest interest available, your FICO score should be: - Answer 760 and
above
