UGBA 196 Final questions with verified solution 2023/2024

UGBA 196 FinalWhat is a default rate of interest? - correct answer -accelerated rate of interest (28-35%) typically charged on your credit blance as a penalty if issuer didn't receive at least the minimum payment by the due date and time and your payment isn't honored by your banks -underpayment or missing a payment, offends bank -overdraft fees How much REIT pay in order to not be taxed on the corporate level? - correct answer -as long as it pays out 90% or more of its income than it pays no tax corporately When can you file for Social Security? Medicare? - correct answer -can file early at age 62, but not for medicare -medicare at age 65 What is the function of multiple mortgages? - correct answer -another loan against property; increase interest in 3-5 years -get a 2nd mortgage to cover the rest of the down payment -the first and second mortgage can be refinanced into a single loan -second mortgage is riskier b/c doesn't get paid until first mortgage gets paid What happens if downpayment in equities isn't paid? - correct answer -20% downpayment usually -may have to buy private mortgage insurance -usually interest is 1-1.6% of loans -lots of losses b/c insuring loans What should you do if you are thinking about adding money to a stock? - correct answer -set a target price for a sotck you hope it will reach -make decision if you want to hold ia ny longer or if you want to sell it What is a subprime mortgage? - correct answer -some lenders will lend 100% of the payment Why are REIT best owned in an IRA account? - correct answer -REIT don't pay taxes unless they distributed 90% of its income -can compound for many years and don't pay taxes/interest What do you do if you think market rates are too risky or too high? - correct answer -HOLD ON TOO MONEY, nothing wrong with that What is the most important in factor in purchasing real estate? - correct answer -LOCATION LOCATION LOCATION What happened during the housing boom? - correct answer -home loans were based on inaccurate and fraudulent information What does homeowners insurance cover? - correct answer -covers house as well as its contents What is tax like if you own a rental real estate? - correct answer -you own profit and that profit is taxable What is carfax? - correct answer -last online stop for a used car should he this -pay 19.99 and it will track by vehicle ID number if a car was every reported stolen, salvaged, etc. -if it is, DO NOT get it What's the price to earnings ratio? - correct answer -divide market price of a share by EPS -tells us that the market is valuing these shares at a certain amount of time what a single share earned in profits the prior year -says how much investors are willing to pay for each dollar of earnings -MOST IMPORTANT: tells what it is now or going forward, not about yesterday What happens if you own rental property, what can get taxed? - correct answer -you borrow money to buy, you can tax deduct interest but NOT loan/principle