James Is a Prospective Car Buyer

question 153

Multiple Choice

James is a prospective car buyer. In his context, which of the following statements would reflect a determining dimension?

• A) He must have enough money, or credit, to buy a car and insure it.
• B) He needs to have a valid driver's license.
• C) He has kids who have to be carpooled.
• D) He needs a safe car.
• E) His office is 2.5 miles from home.

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Definitions:

Principal

The primary amount of a loan or investment, excluding interest or profits.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a specified price.

Maturity

The point in time when a financial instrument or obligation, such as a bond or loan, becomes due and payment is required.

Premium

The amount paid for an insurance policy, or the extra cost above the nominal value of something such as a bond or stock.