Question 1

Danger signals of potential debt problems include:

Accepted Answer

A) paying early. 
B) borrowing money to pay old debts. 
C) talking to your spouse about money. 
D) paying extra payments. 
E) paying the balance in full each month. 
A) paying early. 
B) borrowing money to pay old debts. 
C) talking to your spouse about money. 
D) paying extra payments. 
E) paying the balance in full each month. B

Question 2

The most expensive loans are available from:

Accepted Answer

A) parents. 
B) friends. 
C) federal savings banks. 
D) finance companies. 
E) credit unions. 
A) parents. 
B) friends. 
C) federal savings banks. 
D) finance companies. 
E) credit unions. D

Question 3

If you borrow $150 at 10 percent interest,how much will you repay in one lump-sum at the end of one year using simple interest?

Accepted Answer

A) $100. 
B) $150. 
C) $165. 
D) $115. 
E) $155. 
A) $100. 
B) $150. 
C) $165. 
D) $115. 
E) $155. C

Question 4

A person filing for relief under the bankruptcy code is called bankrupt,not a debtor.

Accepted Answer

A) True 
 B)False

Question 5

Banks often encourage you to make the maximum payment,referred to as the "cardholder amount due."

Accepted Answer

A) True 
 B)False

Question 6

Which one of the following financing methods usually provides a "float" period?

Accepted Answer

A) Installment loan 
B) Credit card 
C) Lump-sum loan 
D) Home equity line of credit 
E) Auto loan 
A) Installment loan 
B) Credit card 
C) Lump-sum loan 
D) Home equity line of credit 
E) Auto loan

Question 7

When more than one payment is made on a simple interest loan,the method of computing interest is known as the:

Accepted Answer

A) add-on interest method. 
B) average daily balance method. 
C) adjusted balance method. 
D) declining balance method. 
E) previous balance method. 
A) add-on interest method. 
B) average daily balance method. 
C) adjusted balance method. 
D) declining balance method. 
E) previous balance method.

Question 8

Which formula dictates that you pay more interest at the beginning of a loan and pay less and less interest as the debt is reduced?

Accepted Answer

A) Adjusted balance method 
B) Previous balance method 
C) The rule of 78s 
D) Average daily balance 
E) Accelerated balance 
A) Adjusted balance method 
B) Previous balance method 
C) The rule of 78s 
D) Average daily balance 
E) Accelerated balance

Question 9

One of the drawbacks of borrowing from parents or family members is that such loans:

Accepted Answer

A) tend to be more expensive than other types of loans. 
B) must be interest-free. 
C) can complicate family relationships. 
D) are limited to oral agreements. 
E) are legally prohibited from establishing repayment dates and terms. 
A) tend to be more expensive than other types of loans. 
B) must be interest-free. 
C) can complicate family relationships. 
D) are limited to oral agreements. 
E) are legally prohibited from establishing repayment dates and terms.

Question 10

Which of the following is not true about the Credit CARD Act of 2009?

Accepted Answer

A) States that teaser rates must stay in effect for at least 6 months 
B) Makes new disclosure statements clear and more timely 
C) Requires credit card issuers to post their standard card agreements on the Internet 
D) Allows card issuers to apply new higher interest rates to the existing card balances 
E) Requires issuers to mail monthly statements at least 21 days before payment is due 
A) States that teaser rates must stay in effect for at least 6 months 
B) Makes new disclosure statements clear and more timely 
C) Requires credit card issuers to post their standard card agreements on the Internet 
D) Allows card issuers to apply new higher interest rates to the existing card balances 
E) Requires issuers to mail monthly statements at least 21 days before payment is due

Question 11

Which of the following is/are a signal of potential debt problems?

Accepted Answer

A) Paying only the minimum balance on credit card bills each month 
B) Missing payments or paying late 
C) Using savings to pay routine bills 
D) Depending on overtime to meet everyday expenses 
E) All of these are danger signals 
A) Paying only the minimum balance on credit card bills each month 
B) Missing payments or paying late 
C) Using savings to pay routine bills 
D) Depending on overtime to meet everyday expenses 
E) All of these are danger signals

Question 12

The Consumer Credit Counseling Service (CCCS)is supported by contributions from:

Accepted Answer

A) banks. 
B) consumer finance companies. 
C) credit unions. 
D) merchants. 
E) All of these 
A) banks. 
B) consumer finance companies. 
C) credit unions. 
D) merchants. 
E) All of these

Question 13

All loans to or from family members should:

Accepted Answer

A) be in writing. 
B) state the interest rate. 
C) state the repayment schedule. 
D) state the final payment date. 
E) All of these 
A) be in writing. 
B) state the interest rate. 
C) state the repayment schedule. 
D) state the final payment date. 
E) All of these

Question 14

You can often obtain medium-priced loans from:

Accepted Answer

A) parents or family members. 
B) American Express. 
C) Diners Club. 
D) finance companies. 
E) credit unions and federal savings banks. 
A) parents or family members. 
B) American Express. 
C) Diners Club. 
D) finance companies. 
E) credit unions and federal savings banks.

Question 15

If a new-car loan costs 6%,then a used-car loan may cost:

Accepted Answer

A) a lower percentage. 
B) the same percentage. 
C) slightly more. 
D) significantly more. 
E) a substantially higher percentage. 
A) a lower percentage. 
B) the same percentage. 
C) slightly more. 
D) significantly more. 
E) a substantially higher percentage.

Question 16

If you receive a phone call from a debt collector:

Accepted Answer

A) hang up on him or her. 
B) expect follow-up written communication within five days. 
C) call the police. 
D) threaten the collector with a law suit. 
E) contact your attorney immediately. 
A) hang up on him or her. 
B) expect follow-up written communication within five days. 
C) call the police. 
D) threaten the collector with a law suit. 
E) contact your attorney immediately.

Question 17

Which formula is used by creditors and involves tables based on a mathematical formula to determine how much interest you have paid at any point in a loan?

Accepted Answer

A) Simple interest formula 
B) Compound interest formula 
C) Multiple compound interest formula 
D) The rule of 78s 
E) The rule of 72s 
A) Simple interest formula 
B) Compound interest formula 
C) Multiple compound interest formula 
D) The rule of 78s 
E) The rule of 72s

Question 18

Explain the Rule of 78s.

Accepted Answer

The rule of 78s is a mathematical formul

Question 19

Explain the two choices available in declaring personal bankruptcy.

Accepted Answer

Answers will vary.Chapter 7 is a straigh

Question 20

Anyone who is overburdened by credit obligations can phone,write,or visit a Consumer Credit Counseling Service (CCCS)office.

Accepted Answer

A) True 
 B)False

Danger signals of potential debt problems include:

The most expensive loans are available from:

If you borrow $150 at 10 percent interest,how much will you repay in one lump-sum at the end of one year using simple interest?

A person filing for relief under the bankruptcy code is called bankrupt,not a debtor.

Banks often encourage you to make the maximum payment,referred to as the "cardholder amount due."

Which one of the following financing methods usually provides a "float" period?

When more than one payment is made on a simple interest loan,the method of computing interest is known as the:

Which formula dictates that you pay more interest at the beginning of a loan and pay less and less interest as the debt is reduced?

One of the drawbacks of borrowing from parents or family members is that such loans:

Which of the following is not true about the Credit CARD Act of 2009?

Which of the following is/are a signal of potential debt problems?

The Consumer Credit Counseling Service (CCCS)is supported by contributions from:

All loans to or from family members should:

You can often obtain medium-priced loans from:

If a new-car loan costs 6%,then a used-car loan may cost:

If you receive a phone call from a debt collector:

Which formula is used by creditors and involves tables based on a mathematical formula to determine how much interest you have paid at any point in a loan?

Explain the Rule of 78s.

Explain the two choices available in declaring personal bankruptcy.

Anyone who is overburdened by credit obligations can phone,write,or visit a Consumer Credit Counseling Service (CCCS)office.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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Exam 7: Choosing a Source of Credit: the Costs of Credit Alternatives

Danger signals of potential debt problems include:

The most expensive loans are available from:

If you borrow $150 at 10 percent interest,how much will you repay in one lump-sum at the end of one year using simple interest?

A person filing for relief under the bankruptcy code is called bankrupt,not a debtor.

Banks often encourage you to make the maximum payment,referred to as the "cardholder amount due."

Which one of the following financing methods usually provides a "float" period?

When more than one payment is made on a simple interest loan,the method of computing interest is known as the:

Which formula dictates that you pay more interest at the beginning of a loan and pay less and less interest as the debt is reduced?

One of the drawbacks of borrowing from parents or family members is that such loans:

Which of the following is not true about the Credit CARD Act of 2009?

Which of the following is/are a signal of potential debt problems?

The Consumer Credit Counseling Service (CCCS)is supported by contributions from:

All loans to or from family members should:

You can often obtain medium-priced loans from:

If a new-car loan costs 6%,then a used-car loan may cost:

If you receive a phone call from a debt collector:

Which formula is used by creditors and involves tables based on a mathematical formula to determine how much interest you have paid at any point in a loan?

Explain the Rule of 78s.

Explain the two choices available in declaring personal bankruptcy.

Anyone who is overburdened by credit obligations can phone,write,or visit a Consumer Credit Counseling Service (CCCS)office.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters