Question 1

Borrowing from credit unions has several advantages but does not include:

Accepted Answer

A) costly credit life insurance. 
B) sympathy toward borrowers with legitimate payment problems. 
C) personalized service. 
D) the same range of consumer loans that banks offer. 
E) None of these 
A) costly credit life insurance. 
B) sympathy toward borrowers with legitimate payment problems. 
C) personalized service. 
D) the same range of consumer loans that banks offer. 
E) None of these

Question 2

Which federal law,passed in 1969,requires creditors to state the cost of borrowing as a dollar amount?

Accepted Answer

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

Question 3

Before you sign a loan contract,make sure to:

Accepted Answer

A) explore other financing options. 
B) contact several lenders and compare terms, rates, and other costs. 
C) know your rights under the law. 
D) All of these. 
E) None of these. 
A) explore other financing options. 
B) contact several lenders and compare terms, rates, and other costs. 
C) know your rights under the law. 
D) All of these. 
E) None of these.

Question 4

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

Accepted Answer

A) Paying only the minimum balance 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 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 5

Which one of the following financing methods 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 6

If you want to minimize your borrowing costs,you may need to accept conditions that reduce the risk for your lender.

Accepted Answer

A) True 
 B)False

Question 7

Henry Garrison starts the month with a balance on his credit card of $1,000.The average daily balance for the month including purchase is $883.The average daily balance for the month excluding new purchase is $750.The bank charges 1.5 percent per month and uses the average daily balance including new purchases method.What would Henry's finance charges be for the month?

Accepted Answer

A) $7.50 
B) $13.25 
C) $11.25 
D) $15.00 
E) $18.00 
A) $7.50 
B) $13.25 
C) $11.25 
D) $15.00 
E) $18.00

Question 8

Float can be defined as:

Accepted Answer

A) the interest charged during one billing period. 
B) the principal balance due on a loan. 
C) a home equity loan. 
D) a certain number of days during which no interest is charged. 
E) a lump-sum loan from a credit union. 
A) the interest charged during one billing period. 
B) the principal balance due on a loan. 
C) a home equity loan. 
D) a certain number of days during which no interest is charged. 
E) a lump-sum loan from a credit union.

Question 9

Variations of simple interest do not include the:

Accepted Answer

A) Add-on interest method 
B) Bank discount method 
C) Adjusted balance method 
D) Simple interest on the declining balance method 
E) Compound interest method 
A) Add-on interest method 
B) Bank discount method 
C) Adjusted balance method 
D) Simple interest on the declining balance method 
E) Compound interest method

Question 10

If creditors give you no credit for payments made during the billing period,it is called the adjusted balance method.

Accepted Answer

A) True 
 B)False

Question 11

Which type of debt would not be forgiven in a straight bankruptcy?

Accepted Answer

A) Credit card debt 
B) Medical bills 
C) Personal loans 
D) Educational loans 
E) Utility bills 
A) Credit card debt 
B) Medical bills 
C) Personal loans 
D) Educational loans 
E) Utility bills

Question 12

Jerry Allison starts the month with a balance on his credit card of $1,000.On the 10th day of the month,he purchases $200 in clothes with his credit card.On the 15th day of the month he makes a payment on his credit card of $500.The bank charges 1.5 percent interest per month using the previous balance method.What would Jerry's finance charges be for the month?

Accepted Answer

A) $7.50 
B) $13.25 
C) $11.25 
D) $15.00 
E) $18.00 
A) $7.50 
B) $13.25 
C) $11.25 
D) $15.00 
E) $18.00

Question 13

Mature consumers have certain information and:

Accepted Answer

A) They demonstrate self-discipline. 
B) They control their impulses and use sound judgment. 
C) They accept responsibility for money management. 
D) They are able to postpone expenditures when needed. 
E) All of these. 
A) They demonstrate self-discipline. 
B) They control their impulses and use sound judgment. 
C) They accept responsibility for money management. 
D) They are able to postpone expenditures when needed. 
E) All of these.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

The rule of 78s formula dictates that you pay less interest at the beginning of a loan.

Accepted Answer

A) True 
 B)False

Question 16

Credit life insurance provides for the repayment of the loan if the borrower dies.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

You just received a credit card application.Which of the following are included with this application?

Accepted Answer

A) Annual fee 
B) Annual percentage rate for purchases 
C) Penalty fees 
D) Method used to calculate balance 
E) All of these 
A) Annual fee 
B) Annual percentage rate for purchases 
C) Penalty fees 
D) Method used to calculate balance 
E) All of these

Question 19

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 20

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.

Borrowing from credit unions has several advantages but does not include:

Which federal law,passed in 1969,requires creditors to state the cost of borrowing as a dollar amount?

Before you sign a loan contract,make sure to:

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

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

If you want to minimize your borrowing costs,you may need to accept conditions that reduce the risk for your lender.

Float can be defined as:

Variations of simple interest do not include the:

If creditors give you no credit for payments made during the billing period,it is called the adjusted balance method.

Which type of debt would not be forgiven in a straight bankruptcy?

Mature consumers have certain information and:

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

The rule of 78s formula dictates that you pay less interest at the beginning of a loan.

Credit life insurance provides for the repayment of the loan if the borrower dies.

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

You just received a credit card application.Which of the following are included with this application?

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?

Collection agencies are allowed to:

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 Stock

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

Borrowing from credit unions has several advantages but does not include:

Which federal law,passed in 1969,requires creditors to state the cost of borrowing as a dollar amount?

Before you sign a loan contract,make sure to:

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

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

If you want to minimize your borrowing costs,you may need to accept conditions that reduce the risk for your lender.

Float can be defined as:

Variations of simple interest do not include the:

If creditors give you no credit for payments made during the billing period,it is called the adjusted balance method.

Which type of debt would not be forgiven in a straight bankruptcy?

Mature consumers have certain information and:

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

The rule of 78s formula dictates that you pay less interest at the beginning of a loan.

Credit life insurance provides for the repayment of the loan if the borrower dies.

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

You just received a credit card application.Which of the following are included with this application?

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?

Collection agencies are allowed to:

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 Stock

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters