Question 1

A straight bankruptcy _____.

Accepted Answer

A) eliminates all the obligations of a debtor 
B) results in the loss of all the assets of a debtor 
C) results in the repayment of debt within three to five years 
D) exempts a debtor from all the tax payments and payments for alimony and child-support 
E) allows a debtor to retain some other personal assets as per federal regulations 
A) eliminates all the obligations of a debtor 
B) results in the loss of all the assets of a debtor 
C) results in the repayment of debt within three to five years 
D) exempts a debtor from all the tax payments and payments for alimony and child-support 
E) allows a debtor to retain some other personal assets as per federal regulations

Question 2

Denise (a single taxpayer)contributes $6,000 annually to her church.In addition,she owns a home in which she has $20,000 equity and she itemizes her deductions.If she pays $1,000 interest on credit cards,$6,000 interest on her home equity loan,and is in the 25 percent marginal tax bracket,calculate Denise's tax savings from these interest payments.

Accepted Answer

The interest paid on the home equity loa

Question 3

Which of the following is the correct expression for calculating the debt safety ratio?

Accepted Answer

A) Total monthly consumer credit payments / Monthly take-home pay 
B) Monthly take-home pay / Total monthly consumer credit payments 
C) Total monthly consumer credit payments / Gross monthly pay 
D) Gross monthly pay / Total monthly consumer credit payments 
E) Gross monthly pay / Monthly take-home pay 
A) Total monthly consumer credit payments / Monthly take-home pay 
B) Monthly take-home pay / Total monthly consumer credit payments 
C) Total monthly consumer credit payments / Gross monthly pay 
D) Gross monthly pay / Total monthly consumer credit payments 
E) Gross monthly pay / Monthly take-home pay

Question 4

A borrower who pays his or her account balance in full each month should get a credit card with ____________. ​

Accepted Answer

A) a long grace period 
B) a high rate of interest on unpaid balances 
C) accumulating annual fees 
D) a minimum monthly payment equal to the interest on the unpaid balance 
A) a long grace period 
B) a high rate of interest on unpaid balances 
C) accumulating annual fees 
D) a minimum monthly payment equal to the interest on the unpaid balance

Question 5

A retail charge card can be accessed by writing checks against demand deposit.

Accepted Answer

A) True 
 B)False

Question 6

Credit should not be consistently used for purchasing nondurable goods.

Accepted Answer

A) True 
 B)False

Question 7

People who let their credit balances build up are mortgaging their future.

Accepted Answer

A) True 
 B)False

Question 8

The most common method used by lenders to apply finance charges on credit cards is the average daily balance method including new purchases.

Accepted Answer

A) True 
 B)False

Question 9

An improper use of extended credit is buying ____________. ​

Accepted Answer

A) an expensive car 
B) an expensive house 
C) an expensive dinner 
D) a piece of land 
A) an expensive car 
B) an expensive house 
C) an expensive dinner 
D) a piece of land

Question 10

Which of the following cards provides direct access to your checking account?

Accepted Answer

A) Retail charge cards 
B) Affinity cards 
C) Student credit cards 
D) Reward cards 
E) Bank debit cards 
A) Retail charge cards 
B) Affinity cards 
C) Student credit cards 
D) Reward cards 
E) Bank debit cards

Question 11

Retail charge cards are cheaper than credit cards provided by financial institutions.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is true of retail charge cards?

Accepted Answer

A) Retail charge cards are issued by retailers that allow customers to charge goods and services up to a preestablished amount. 
B) Retail charge cards work exactly like debit cards and provide direct access to the checking accounts of consumers. 
C) Retail charge cards are issued in conjunction with some charitable,political,or other nonprofit organization. 
D) Retail charge cards are secured with some form of collateral,such as a bank CD. 
E) Retail charge cards provide incentives,such as cash,merchandise rebates,airline tickets,or even investments to the users. 
A) Retail charge cards are issued by retailers that allow customers to charge goods and services up to a preestablished amount. 
B) Retail charge cards work exactly like debit cards and provide direct access to the checking accounts of consumers. 
C) Retail charge cards are issued in conjunction with some charitable,political,or other nonprofit organization. 
D) Retail charge cards are secured with some form of collateral,such as a bank CD. 
E) Retail charge cards provide incentives,such as cash,merchandise rebates,airline tickets,or even investments to the users.

Question 13

Credit offered in the form of ____________ is most common in department and clothing stores and other high-volume outlets,where customers are likely to make several purchases each month. ​

Accepted Answer

A) collateralized credit cards 
B) reward credit cards 
C) affinity cards 
D) retail charge cards 
A) collateralized credit cards 
B) reward credit cards 
C) affinity cards 
D) retail charge cards

Question 14

The first step in establishing a credit history is to ____________. ​

Accepted Answer

A) get a credit card 
B) open checking and savings accounts 
C) borrow from neighbors 
D) pay cash for all purchases 
A) get a credit card 
B) open checking and savings accounts 
C) borrow from neighbors 
D) pay cash for all purchases

Question 15

To establish creditworthiness and to have a good credit score,one should probably first:

Accepted Answer

A) open savings and checking accounts. 
B) use credit extensively. 
C) arrange for a small loan. 
D) pay cash for all purchases. 
E) arrange for a large loan from close relatives. 
A) open savings and checking accounts. 
B) use credit extensively. 
C) arrange for a small loan. 
D) pay cash for all purchases. 
E) arrange for a large loan from close relatives.

Question 16

Overspending will help you manage your budget effectively.

Accepted Answer

A) True 
 B)False

Question 17

Using ____________ to handle financial emergencies is recommended. ​

Accepted Answer

A) credit 
B) savings 
C) a bank loan 
D) a checking account 
A) credit 
B) savings 
C) a bank loan 
D) a checking account

Question 18

Which of the following is an improper use of credit?

Accepted Answer

A) Buying a home 
B) Buying a short-lived good 
C) Spreading payments within a budget 
D) Purchasing a big-ticket item 
E) Meeting a financial emergency 
A) Buying a home 
B) Buying a short-lived good 
C) Spreading payments within a budget 
D) Purchasing a big-ticket item 
E) Meeting a financial emergency

Question 19

When canceling a credit card,you should cut up the card and _____ that you are canceling your account.

Accepted Answer

A) inform the issuer in writing 
B) call and inform the issuer 
C) inform the credit bureau in writing 
D) call and inform the credit bureau 
E) inform the future lender in writing 
A) inform the issuer in writing 
B) call and inform the issuer 
C) inform the credit bureau in writing 
D) call and inform the credit bureau 
E) inform the future lender in writing

Question 20

Anna uses her credit card regularly,but she pays off her total outstanding balance monthly.Anna should look for a credit card with:

Accepted Answer

A) no reward points. 
B) low interest rates. 
C) no grace period. 
D) no rebate programs. 
E) no annual fees. 
A) no reward points. 
B) low interest rates. 
C) no grace period. 
D) no rebate programs. 
E) no annual fees.

A straight bankruptcy _____.

Which of the following is the correct expression for calculating the debt safety ratio?

A borrower who pays his or her account balance in full each month should get a credit card with ____________.

A retail charge card can be accessed by writing checks against demand deposit.

Credit should not be consistently used for purchasing nondurable goods.

People who let their credit balances build up are mortgaging their future.

The most common method used by lenders to apply finance charges on credit cards is the average daily balance method including new purchases.

An improper use of extended credit is buying ____________.

Which of the following cards provides direct access to your checking account?

Retail charge cards are cheaper than credit cards provided by financial institutions.

Which of the following statements is true of retail charge cards?

Credit offered in the form of ____________ is most common in department and clothing stores and other high-volume outlets,where customers are likely to make several purchases each month.

The first step in establishing a credit history is to ____________.

To establish creditworthiness and to have a good credit score,one should probably first:

Overspending will help you manage your budget effectively.

Using ____________ to handle financial emergencies is recommended.

Which of the following is an improper use of credit?

When canceling a credit card,you should cut up the card and _____ that you are canceling your account.

Anna uses her credit card regularly,but she pays off her total outstanding balance monthly.Anna should look for a credit card with:

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, ETFS and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 6: Using Credit

A straight bankruptcy _____.

Which of the following is the correct expression for calculating the debt safety ratio?

A borrower who pays his or her account balance in full each month should get a credit card with ____________. ​

A retail charge card can be accessed by writing checks against demand deposit.

Credit should not be consistently used for purchasing nondurable goods.

People who let their credit balances build up are mortgaging their future.

The most common method used by lenders to apply finance charges on credit cards is the average daily balance method including new purchases.

An improper use of extended credit is buying ____________. ​

Which of the following cards provides direct access to your checking account?

Retail charge cards are cheaper than credit cards provided by financial institutions.

Which of the following statements is true of retail charge cards?

Credit offered in the form of ____________ is most common in department and clothing stores and other high-volume outlets,where customers are likely to make several purchases each month. ​

The first step in establishing a credit history is to ____________. ​

To establish creditworthiness and to have a good credit score,one should probably first:

Overspending will help you manage your budget effectively.

Using ____________ to handle financial emergencies is recommended. ​

Which of the following is an improper use of credit?

When canceling a credit card,you should cut up the card and _____ that you are canceling your account.

Anna uses her credit card regularly,but she pays off her total outstanding balance monthly.Anna should look for a credit card with:

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, ETFS and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

A borrower who pays his or her account balance in full each month should get a credit card with ____________.

An improper use of extended credit is buying ____________.

Credit offered in the form of ____________ is most common in department and clothing stores and other high-volume outlets,where customers are likely to make several purchases each month.

The first step in establishing a credit history is to ____________.

Using ____________ to handle financial emergencies is recommended.