1.) What statement best describes an installment loan?

A. A loan with regular equal payments.

B. A loan where the payments change as interest rates change.

C. A loan you pay off all at once.

2.) Choose the best answer to the following question. Explain your reasoning with one or more complete sentences. What does a negative monthly cash flow mean?

Choose the correct answer below.

A.It means your investments are losing value. Each month you lose a percentage of the money that you invested, which is the reason for the negative cash flow.

B.It means you are spending more money than you are taking in. When you subtract your total expenses from your total income, the difference is positive.

C.It means you are taking in more money than you are spending. When you subtract your total expenses from your total income, the difference is negative.

D.It means your investments are losing value. When the interest rates decrease, your cash flow becomes negative.

E.It means you are taking in more money than you are spending. When you subtract your total expenses from your total income, the difference is positive.

F.It means you are spending more money than you are taking in. When you subtract your total expenses from your total income, the difference is negative.