Question 1

Installment sales credit is a loan that allows you to receive high-priced items,such as large appliances or furniture.

Accepted Answer

A) True 
 B)False

Question 2

The larger the debt-to-equity ratio,the riskier the situation is for lenders and borrowers.

Accepted Answer

A) True 
 B)False

Question 3

The borrower's financial ability to meet credit obligations is called:

Accepted Answer

A) capacity. 
B) character. 
C) capital. 
D) collateral. 
E) conditions. 
A) capacity. 
B) character. 
C) capital. 
D) collateral. 
E) conditions.

Question 4

A loan officer is examining your income and the amount of your existing debt payments and monthly expenses in deciding whether to make a loan to you today.Which aspect of the 5 Cs of lending is the loan officer most likely looking at?

Accepted Answer

A) Character 
B) Capacity 
C) Capital 
D) Collateral 
E) Conditions 
A) Character 
B) Capacity 
C) Capital 
D) Collateral 
E) Conditions

Question 5

Which one of the following is not included in the 5 C's of credit?

Accepted Answer

A) Conditions 
B) Cash flow 
C) Collateral 
D) Capacity 
E) Character 
A) Conditions 
B) Cash flow 
C) Collateral 
D) Capacity 
E) Character

Question 6

What is revolving check credit?

Accepted Answer

Revolving check credit is a prearranged

Question 7

Co-branded credit cards:

Accepted Answer

A) are often linked with a certain business trade name offering "points." 
B) help build customer loyalty. 
C) allow the cardholder to earn rebates on products and services. 
D) have increased in popularity since 1992. 
E) All of these are correct. 
A) are often linked with a certain business trade name offering "points." 
B) help build customer loyalty. 
C) allow the cardholder to earn rebates on products and services. 
D) have increased in popularity since 1992. 
E) All of these are correct.

Question 8

Which federal consumer credit law regulates the advertising of credit terms?

Accepted Answer

A) Fair Debt Collection Practices Act 
B) Equal Credit Opportunity Act 
C) Fair Credit Billing Act 
D) Fair Credit Reporting Act 
E) Truth in Lending Act 
A) Fair Debt Collection Practices Act 
B) Equal Credit Opportunity Act 
C) Fair Credit Billing Act 
D) Fair Credit Reporting Act 
E) Truth in Lending Act

Question 9

Which one of the following is not a source that provides data to credit bureaus?

Accepted Answer

A) Banks 
B) Finance companies 
C) Credit card companies 
D) Court records 
E) Internal Revenue Service 
A) Banks 
B) Finance companies 
C) Credit card companies 
D) Court records 
E) Internal Revenue Service

Question 10

College students are not a prime target for credit card issuers.

Accepted Answer

A) True 
 B)False

Question 11

The market value of Karen's home is $120,000 and the balance on her mortgage loan is $80,000.The lender has agreed to let her borrow up to 75% of the total value of her home less the mortgage.How much can she borrow with a home equity loan?

Accepted Answer

A) $10,000 
B) $40,000 
C) $80,000 
D) $90,000 
E) $120,000 
A) $10,000 
B) $40,000 
C) $80,000 
D) $90,000 
E) $120,000

Question 12

Jane Calvert is applying for a loan from a bank.The bank knows she owns a house worth $160,000 and a car with a trade-in value of $12,000 as well as other personal assets worth approximately $44,000.Which one of the 5 Cs of credit is the bank looking at?

Accepted Answer

A) Character 
B) Capacity 
C) Capital 
D) Collateral 
E) Conditions 
A) Character 
B) Capacity 
C) Capital 
D) Collateral 
E) Conditions

Question 13

The maximum dollar amount of credit the lender has made available to you is called:

Accepted Answer

A) revolving credit. 
B) line of credit. 
C) convenience credit. 
D) installment cash credit. 
E) single lump-sum credit. 
A) revolving credit. 
B) line of credit. 
C) convenience credit. 
D) installment cash credit. 
E) single lump-sum credit.

Question 14

Jake Smith purchases a big screen TV on credit and will repay the loan with one payment at the end of 90 days.What type of credit did Jake use?

Accepted Answer

A) Installment sales credit 
B) Installment cash credit 
C) Single lump-sum credit 
D) Revolving check credit 
E) Open-end credit 
A) Installment sales credit 
B) Installment cash credit 
C) Single lump-sum credit 
D) Revolving check credit 
E) Open-end credit

Question 15

With a revolving line of credit,borrowings are permitted up to a specified limit and for a stated period,usually 5 to 10 years.

Accepted Answer

A) True 
 B)False

Question 16

It is safer to use credit,since charge accounts and credit cards let you shop and travel without carrying a large amount of cash.

Accepted Answer

A) True 
 B)False

Question 17

If your identity is stolen,the Federal Trade Commission recommends that you take what three actions immediately?

Accepted Answer

If your identity is stolen,take three ac

Question 18

When activating a new credit card,consumers are warned to watch for "the pitch." Describe "the pitch."

Accepted Answer

When activating a new credit card,you ma

Question 19

Which one of the following is an advantage of using credit?

Accepted Answer

A) Potential bankruptcy 
B) Spending beyond your budget 
C) Providing help in emergencies 
D) Committing future income to pay for current purchases 
E) Incurring interest charges 
A) Potential bankruptcy 
B) Spending beyond your budget 
C) Providing help in emergencies 
D) Committing future income to pay for current purchases 
E) Incurring interest charges

Question 20

If your debit card is lost or stolen,you must work directly with the issuer.

Accepted Answer

A) True 
 B)False

Installment sales credit is a loan that allows you to receive high-priced items,such as large appliances or furniture.

The larger the debt-to-equity ratio,the riskier the situation is for lenders and borrowers.

The borrower's financial ability to meet credit obligations is called:

A loan officer is examining your income and the amount of your existing debt payments and monthly expenses in deciding whether to make a loan to you today.Which aspect of the 5 Cs of lending is the loan officer most likely looking at?

Which one of the following is not included in the 5 C's of credit?

What is revolving check credit?

Co-branded credit cards:

Which federal consumer credit law regulates the advertising of credit terms?

Which one of the following is not a source that provides data to credit bureaus?

College students are not a prime target for credit card issuers.

The market value of Karen's home is $120,000 and the balance on her mortgage loan is $80,000.The lender has agreed to let her borrow up to 75% of the total value of her home less the mortgage.How much can she borrow with a home equity loan?

Jane Calvert is applying for a loan from a bank.The bank knows she owns a house worth $160,000 and a car with a trade-in value of $12,000 as well as other personal assets worth approximately $44,000.Which one of the 5 Cs of credit is the bank looking at?

The maximum dollar amount of credit the lender has made available to you is called:

Jake Smith purchases a big screen TV on credit and will repay the loan with one payment at the end of 90 days.What type of credit did Jake use?

With a revolving line of credit,borrowings are permitted up to a specified limit and for a stated period,usually 5 to 10 years.

It is safer to use credit,since charge accounts and credit cards let you shop and travel without carrying a large amount of cash.

If your identity is stolen,the Federal Trade Commission recommends that you take what three actions immediately?

When activating a new credit card,consumers are warned to watch for "the pitch." Describe "the pitch."

Which one of the following is an advantage of using credit?

If your debit card is lost or stolen,you must work directly with the issuer.

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

Choosing a Source of Credit: the Costs of Credit Alternatives

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 6: Introduction to Consumer Credit

Installment sales credit is a loan that allows you to receive high-priced items,such as large appliances or furniture.

The larger the debt-to-equity ratio,the riskier the situation is for lenders and borrowers.

The borrower's financial ability to meet credit obligations is called:

A loan officer is examining your income and the amount of your existing debt payments and monthly expenses in deciding whether to make a loan to you today.Which aspect of the 5 Cs of lending is the loan officer most likely looking at?

Which one of the following is not included in the 5 C's of credit?

What is revolving check credit?

Co-branded credit cards:

Which federal consumer credit law regulates the advertising of credit terms?

Which one of the following is not a source that provides data to credit bureaus?

College students are not a prime target for credit card issuers.

The market value of Karen's home is $120,000 and the balance on her mortgage loan is $80,000.The lender has agreed to let her borrow up to 75% of the total value of her home less the mortgage.How much can she borrow with a home equity loan?

Jane Calvert is applying for a loan from a bank.The bank knows she owns a house worth $160,000 and a car with a trade-in value of $12,000 as well as other personal assets worth approximately $44,000.Which one of the 5 Cs of credit is the bank looking at?

The maximum dollar amount of credit the lender has made available to you is called:

Jake Smith purchases a big screen TV on credit and will repay the loan with one payment at the end of 90 days.What type of credit did Jake use?

With a revolving line of credit,borrowings are permitted up to a specified limit and for a stated period,usually 5 to 10 years.

It is safer to use credit,since charge accounts and credit cards let you shop and travel without carrying a large amount of cash.

If your identity is stolen,the Federal Trade Commission recommends that you take what three actions immediately?

When activating a new credit card,consumers are warned to watch for "the pitch." Describe "the pitch."

Which one of the following is an advantage of using credit?

If your debit card is lost or stolen,you must work directly with the issuer.

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

Choosing a Source of Credit: the Costs of Credit Alternatives

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