GEB 3006 FINAL EXAM QUESTIONS WITH CORRECT ANSWERS 100% GUARANTEED PASS
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Course
GEB 3006
Institution
GEB 3006
GEB 3006 FINAL EXAM QUESTIONS WITH CORRECT ANSWERS 100% GUARANTEED PASS
The housing expense ratio of PITI divided by gross monthly income should not exceed a maximum of ____. - Answer- 18% for conventional loans and 19% for FHA loans
The total debt ratio of (PITI + long term debt obligations)...
GEB 3006 FINAL EXAM QUESTIONS
WITH CORRECT ANSWERS 100%
GUARANTEED PASS
The housing expense ratio of PITI divided by gross monthly income should not exceed
a maximum of ____. - Answer- 18% for conventional loans and 19% 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.
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
square footage = - Answer- sale price / area under ac unit and heater
Which of the following would tend to have the highest interest rate at any given time. -
Answer- Home equity line of credit (HELOC)
Fixed rate home mortgages should be refinanced when interest rates - Answer-
Decrease.
Early in the life of a mortgage, - Answer- most of the payment goes toward interest with
very little being applied to principal.
The primary risk of having an adjustable rate (ARM) mortgage is: - Answer- interest
rates could increase
If you need life insurance because of a large mortgage or dependent children, you
should normally buy: - Answer- Term life it is cheaper
The key to successful investing - Answer- is asset class allocation, diversification, and
appropriate use of taxable, tax deferred and tax free accounts
Assume a student has 4 individual stocks worth $2,500 each. In this case: - Answer-
The student is not adequately diversified.
, The total return on a stock is the total of the: - Answer- Dividend yield and capital gain
yield.
div yield formula - Answer- annual dividend / stock price
What type of stock has greater risk and often does not pay dividends? - Answer- small
cap stock
If a company's earnings do not vary much with the economy, it would be called a ____
stock. - Answer- defense
The risks of the overall market that can't be diversified by adding more stocks to a
portfolio is called _____ risk. - Answer- systematic or market
Over the long term, which asset class provided the highest rate of return? - Answer-
stocks
The historical equity risk premium or excess market return for stocks over risk free
investments is _____. - Answer- 4.4%
The returns on Real Estate Investment Trusts (REITs) is in the same range of returns
as ______. - Answer- stocks
The US stock market is essentially a ___________ market. - Answer- large cap
A stock with a beta of 2.0 would be a _______ stock. - Answer- high risk
For long term investments, a 30 year old should have about ___ invested in equity
securities. - Answer- 80%
Which type of mutual fund would maintain a reasonably appropriate allocation of stocks
and bonds for your age? - Answer- targeted retirement date stocks
If interest rates decrease, the price of a bond will: - Answer- increase
The best predictor of future mutual fund performance is: - Answer- expense ratio
One can reduce the risk of out living your savings by starting to save early in life rather
than - Answer- in your 40s and 50s.
If you can limit annual withdrawals from your 401-K to no more than ____, then your
money should last forever. - Answer- 4%
When calculating the amount a person can withdraw from their 401-K, it is best to use a
__________ annuity which will allow the individual to increase their payment each year
for inflation. - Answer- growing
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