Question 1

The most basic method of calculating interest is the compound interest calculation.

Accepted Answer

A) True 
 B)False

Question 2

With the add-on interest method,interest is calculated on the full amount of the original principal.

Accepted Answer

A) True 
 B)False

Question 3

The consumer credit laws require that an advance notice be given before repossessing a car.

Accepted Answer

A) True 
 B)False

Question 4

In a straight bankruptcy,many,but not all,debts are forgiven.

Accepted Answer

A) True 
 B)False

Question 5

The Truth in Lending law does not set the interest rates or tell the creditor how to make interest calculations.

Accepted Answer

A) True 
 B)False

Question 6

Chuck Stallings qualifies for an American Express card.Which of the following offers this type of loan?

Accepted Answer

A) Credit union 
B) Check casher 
C) Finance company 
D) T&E card 
E) Commercial bank 
A) Credit union 
B) Check casher 
C) Finance company 
D) T&E card 
E) Commercial bank

Question 7

The two most common methods of calculating interest are compound and simple interest formulas.

Accepted Answer

A) True 
 B)False

Question 8

The annual percentage rate is the percentage cost (or relative cost)of credit on a yearly basis.

Accepted Answer

A) True 
 B)False

Question 9

"Keeping up with the Joneses" is one of the frequent reasons for indebtedness.

Accepted Answer

A) True 
 B)False

Question 10

In a Chapter 7 bankruptcy,the debtor:

Accepted Answer

A) is required to draw up a petition listing his or her assets and liabilities. 
B) does not have to pay a filing fee. 
C) is called a "bankrupt." 
D) does not have to pay outstanding alimony and child support payments. 
E) does not have to repay educational loans. 
A) is required to draw up a petition listing his or her assets and liabilities. 
B) does not have to pay a filing fee. 
C) is called a "bankrupt." 
D) does not have to pay outstanding alimony and child support payments. 
E) does not have to repay educational loans.

Question 11

Which of the following is not true of debt collection in the United States?

Accepted Answer

A) The industry employs nearly 120,000 workers. 
B) It includes calls and letters. 
C) It includes filing lawsuits to collect the debt from consumers. 
D) It includes workers across approximately 8,000 collection agencies. 
E) It is only a $1 million industry. 
A) The industry employs nearly 120,000 workers. 
B) It includes calls and letters. 
C) It includes filing lawsuits to collect the debt from consumers. 
D) It includes workers across approximately 8,000 collection agencies. 
E) It is only a $1 million industry.

Question 12

The Federal Trade Commission enforces the:

Accepted Answer

A) Truth in Credit Act. 
B) Equal Credit Act. 
C) Fair Credit Receiving Act. 
D) Fair Debt Collection Practices Act. 
E) Fair Credit Payment Act. 
A) Truth in Credit Act. 
B) Equal Credit Act. 
C) Fair Credit Receiving Act. 
D) Fair Debt Collection Practices Act. 
E) Fair Credit Payment Act.

Question 13

Payday,cash advance,check advance,and postdated checks are ________ loans.

Accepted Answer

A) inexpensive 
B) medium-priced 
C) expensive 
D) low APR 
E) variable APR 
A) inexpensive 
B) medium-priced 
C) expensive 
D) low APR 
E) variable APR

Question 14

Collection agencies are allowed to:

Accepted Answer

A) contact you at your place of employment. 
B) contact you as early as 8 am. 
C) say that you will be arrested if you do not pay the debt. 
D) harass you. 
E) threaten harm to you or your family. 
A) contact you at your place of employment. 
B) contact you as early as 8 am. 
C) say that you will be arrested if you do not pay the debt. 
D) harass you. 
E) threaten harm to you or your family.

Question 15

Parents or family members are often the source of the least expensive loans.

Accepted Answer

A) True 
 B)False

Question 16

What is the most common reason why consumers are unable to pay their bills on time?

Accepted Answer

A) Medical expenses 
B) Defective goods and services 
C) Excessive use of credit 
D) Fraudulent use of credit 
E) Consumer fraud 
A) Medical expenses 
B) Defective goods and services 
C) Excessive use of credit 
D) Fraudulent use of credit 
E) Consumer fraud

Question 17

For some debtors,bankruptcy had become an acceptable tool of credit management based on the number of declared bankruptcies in 2005.

Accepted Answer

A) True 
 B)False

Question 18

A few months ago,you sent a certified letter to a debt collector and requested verification of a debt the collector says you owe.You know the letter was received by the collector but you have not received a response to your request.Today,you received a letter threatening court action.What should you do?

Accepted Answer

A) Pay the debt and protect your credit rating 
B) Insist that communications about the debt cease 
C) Renegotiate payment terms with the creditor 
D) Sue the collection agency 
E) Pay half the outstanding balance 
A) Pay the debt and protect your credit rating 
B) Insist that communications about the debt cease 
C) Renegotiate payment terms with the creditor 
D) Sue the collection agency 
E) Pay half the outstanding balance

Question 19

In what ways can you lower the risk to your lender in order to reduce your borrowing costs?

Accepted Answer

One can take one or more of the followin

Question 20

You may be able to borrow at a lower interest rate if you accept a shorter-term loan.

Accepted Answer

A) True 
 B)False

The most basic method of calculating interest is the compound interest calculation.

With the add-on interest method,interest is calculated on the full amount of the original principal.

The consumer credit laws require that an advance notice be given before repossessing a car.

In a straight bankruptcy,many,but not all,debts are forgiven.

The Truth in Lending law does not set the interest rates or tell the creditor how to make interest calculations.

Chuck Stallings qualifies for an American Express card.Which of the following offers this type of loan?

The two most common methods of calculating interest are compound and simple interest formulas.

The annual percentage rate is the percentage cost (or relative cost)of credit on a yearly basis.

"Keeping up with the Joneses" is one of the frequent reasons for indebtedness.

In a Chapter 7 bankruptcy,the debtor:

Which of the following is not true of debt collection in the United States?

The Federal Trade Commission enforces the:

Payday,cash advance,check advance,and postdated checks are ________ loans.

Collection agencies are allowed to:

Parents or family members are often the source of the least expensive loans.

What is the most common reason why consumers are unable to pay their bills on time?

For some debtors,bankruptcy had become an acceptable tool of credit management based on the number of declared bankruptcies in 2005.

In what ways can you lower the risk to your lender in order to reduce your borrowing costs?

You may be able to borrow at a lower interest rate if you accept a shorter-term loan.

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

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

The most basic method of calculating interest is the compound interest calculation.

With the add-on interest method,interest is calculated on the full amount of the original principal.

The consumer credit laws require that an advance notice be given before repossessing a car.

In a straight bankruptcy,many,but not all,debts are forgiven.

The Truth in Lending law does not set the interest rates or tell the creditor how to make interest calculations.

Chuck Stallings qualifies for an American Express card.Which of the following offers this type of loan?

The two most common methods of calculating interest are compound and simple interest formulas.

The annual percentage rate is the percentage cost (or relative cost)of credit on a yearly basis.

"Keeping up with the Joneses" is one of the frequent reasons for indebtedness.

In a Chapter 7 bankruptcy,the debtor:

Which of the following is not true of debt collection in the United States?

The Federal Trade Commission enforces the:

Payday,cash advance,check advance,and postdated checks are ________ loans.

Collection agencies are allowed to:

Parents or family members are often the source of the least expensive loans.

What is the most common reason why consumers are unable to pay their bills on time?

For some debtors,bankruptcy had become an acceptable tool of credit management based on the number of declared bankruptcies in 2005.

In what ways can you lower the risk to your lender in order to reduce your borrowing costs?

You may be able to borrow at a lower interest rate if you accept a shorter-term loan.

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