ABA CTFA Practice Test - Questions Answers, Page 27

Assume that a 'temporary' additional (US federal tax related) first-year bonus depreciation of 50 percent applies to a new, $100,000 piece of equipment purchased by Bellemans Chocolatier, Inc. The asset has a $10,000 estimated final salvage value. If this asset is fully depreciated for tax purposes over its useful life, the overall amount that Bellemans will have depreciated for tax purposes is .

_______ is a mortgage with a single large principal payment due at a specified future date.

Margin on an adjustable rate mortgage is the percentage point a lender adds to the index rate to determine the rate of interest. It is important for home buyers to understand all of the following basic features of an ARM Except:

It occurs when a principal balance on a mortgage loan increases because the monthly loan payment is lower than the amount of monthly interest being charged. What is it?

Two-step ARM is an adjustable rate mortgage with just two interest rates. One for the first ________ years of the loan and the higher one for the remaining term of the loan:

Fixed rate mortgages are popular with home buyers who plan to stay in their homes for at least ________ years and want to know what their payment will be.

It is a loan that allows a lender or other party to share in the appreciated value when the home is sold.

It is the mortgage that requires the borrower to pay only interest; typically used to finance the purchase of more expensive properties.

It is the mortgage that starts with unusually low payments that rise over several years to a fixed payment.