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1.
One advantage of using a home equity line of credit to finance a major purchase is that the interest paid may be tax-deductible.
True. Check the details to be sure, but tax deductibility is common.
2.
Using a growth investment to build up money for a major purchase is most appropriate for a _______ time horizon.
Long. Although it is possible to profit from growth investments in the short term, they tend to fluctuate in value. Keeping them for the long term can smooth out those fluctuations.
3.
The first step in financing a major purchase is to ________.
Establish a household budget. That way, you can see how and where the planned purchase can be fit into your overall financial picture.
4.
Most experts recommend that an emergency fund have how many months worth of living expenses in it?
Three to six. This is just a recommendation, however.
5.
A home equity line of credit is typically a revolving line of credit.
True. HELOCs, as they are called, can be used to finance large purchases.