BUSN 380 help Making Decisions/uophelp.com BUSN 380 help Making Decisions/uophelp.com | Page 49

Question 15. If Tony Jones knows he can get a car loan for up to 5 years
at a credit union but decides that he can easily repay the loan in 3 years,
and therefore gets a 3-year loan, how is Tony reducing the lender's risk?
He is sharing the interest rate risk with his lender.
He is pledging valuable assets that can be seized if the loan is not
repaid.
He is repaying the loan over a faster period of time.
He is taking a larger stake in the asset he is purchasing.
He is obtaining the loan from the credit union.
Question 16. Sarah Russell starts the month with a balance of $1,000 on
her credit card. On the 10th day of the month, she purchases $200 in
clothes with her credit card. On the 15th day of the month she makes a
payment on her credit card of $500. The average daily balance for the
month including the new purchase is $883. The average daily balance
for the month excluding the new purchase is $750. Sarah's interest rate is
1.5% for the month. Sarah's bank calculates the finance charge on the
credit card by using the average daily balance, excluding new purchases.
What would Sarah's finance charges be for the month?
$7.50
$13.25
$18.00
$15.00
$11.25
Question 17. If Jeff rushes to purchase a home by obtaining an interest-
only loan, and the reason why he wants a home is because he wants to
have a house just like the one that his parents had when he was a
teenager, this is an example of which of the following?
Misunderstanding or lack of communication
The use of money to punish
Overindulgence of children