Question 1

You have the right to file your own bankruptcy case and represent yourself at all court hearings.

Accepted Answer

A) True 
 B)False

Question 2

Frank West wants to borrow money for three years to purchase a new boat.He has been offered a seven percent fixed rate loan and also a variable rate loan that has an initial rate of five percent.By choosing the variable rate loan,Chuck is reducing the lender's risk by:

Accepted Answer

A) sharing the interest rate risk. 
B) increasing his monthly payments. 
C) taking a larger stake in the asset he is purchasing. 
D) repaying the loan over a faster period of time. 
E) pledging collateral. 
A) sharing the interest rate risk. 
B) increasing his monthly payments. 
C) taking a larger stake in the asset he is purchasing. 
D) repaying the loan over a faster period of time. 
E) pledging collateral.

Question 3

Chapter 7 bankruptcy is also known as straight bankruptcy.

Accepted Answer

A) True 
 B)False

Question 4

As a result of the recently passed Health Care and Education Reconciliation Act,federal student loans come directly from:

Accepted Answer

A) commercial banks. 
B) finance companies. 
C) the U.S.Department of Education. 
D) the U.S.Department of Family Services. 
E) credit unions. 
A) commercial banks. 
B) finance companies. 
C) the U.S.Department of Education. 
D) the U.S.Department of Family Services. 
E) credit unions.

Question 5

Two key concepts that you should keep in mind when borrowing are the finance charge and the annual percentage rate.

Accepted Answer

A) True 
 B)False

Question 6

Membership in credit unions has been:

Accepted Answer

A) growing steadily. 
B) declining gradually. 
C) statiC. 
D) restricted by the Tax Reform Act of 1986. 
E) restricted by state laws. 
A) growing steadily. 
B) declining gradually. 
C) statiC. 
D) restricted by the Tax Reform Act of 1986. 
E) restricted by state laws.

Question 7

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 period of time 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 period of time during which no interest is chargeD. 
E) a lump-sum loan from a credit union.

Question 8

The fairest method of calculating interest is the adjusted balance method.

Accepted Answer

A) True 
 B)False

Question 9

Which type of credit insurance repays your debt in the event of a loss of income due to illness or injury?

Accepted Answer

A) credit life insurance 
B) credit accident and health insurance 
C) credit property insurance 
D) credit casualty insurance 
E) credit disability insurance 
A) credit life insurance 
B) credit accident and health insurance 
C) credit property insurance 
D) credit casualty insurance 
E) credit disability insurance

Question 10

Which interest formula may be used by creditors 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 11

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 12

Which one of the following is not a danger signal of potential debt problems?

Accepted Answer

A) paying the minimum balance due each month 
B) receiving notice of prompt payment from creditors 
C) using savings to pay for major purchases 
D) repaying loans faster than required 
E) depending on overtime and moonlighting to meet expenses 
A) paying the minimum balance due each month 
B) receiving notice of prompt payment from creditors 
C) using savings to pay for major purchases 
D) repaying loans faster than required 
E) depending on overtime and moonlighting to meet expenses

Question 13

If you receive a phone call from a debt collector,he/she must send you a written notice within ____________ days.

Accepted Answer

A) 5 
B) 10 
C) 15 
D) 20 
E) 30 
A) 5 
B) 10 
C) 15 
D) 20 
E) 30

Question 14

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. 
C) dispute the fact that you owe the money. 
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. 
C) dispute the fact that you owe the money. 
D) threaten the collector with a law suit. 
E) contact your attorney immediately.

Question 15

Which one of the following is often the source of the least expensive loan?

Accepted Answer

A) parents or family members 
B) banks 
C) savings and loan associations 
D) finance companies 
E) loan sharks 
A) parents or family members 
B) banks 
C) savings and loan associations 
D) finance companies 
E) loan sharks

Question 16

The most expensive loans are available from:

Accepted Answer

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

Question 17

Buying on credit is almost always cheaper than paying cash.

Accepted Answer

A) True 
 B)False

Question 18

Which federal law,passed in 1969,requires creditors to state the cost of borrowing in common language?

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 Act 
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 Act

Question 19

Banks often encourage you to make the maximum payment.

Accepted Answer

A) True 
 B)False

Question 20

The CCCS aids families by:

Accepted Answer

A) setting up a budget for them. 
B) paying off their loans. 
C) providing free basic necessities. 
D) providing one month free shelter. 
E) relocating them in less expensive areas. 
A) setting up a budget for them. 
B) paying off their loans. 
C) providing free basic necessities. 
D) providing one month free shelter. 
E) relocating them in less expensive areas.

You have the right to file your own bankruptcy case and represent yourself at all court hearings.

Frank West wants to borrow money for three years to purchase a new boat.He has been offered a seven percent fixed rate loan and also a variable rate loan that has an initial rate of five percent.By choosing the variable rate loan,Chuck is reducing the lender's risk by:

Chapter 7 bankruptcy is also known as straight bankruptcy.

As a result of the recently passed Health Care and Education Reconciliation Act,federal student loans come directly from:

Two key concepts that you should keep in mind when borrowing are the finance charge and the annual percentage rate.

Membership in credit unions has been:

Float can be defined as:

The fairest method of calculating interest is the adjusted balance method.

Which type of credit insurance repays your debt in the event of a loss of income due to illness or injury?

Which interest formula may be used by creditors to determine how much interest you have paid at any point in a loan?

Which one of the following is not a danger signal of potential debt problems?

If you receive a phone call from a debt collector,he/she must send you a written notice within ____________ days.

If you receive a phone call from a debt collector:

Which one of the following is often the source of the least expensive loan?

The most expensive loans are available from:

Buying on credit is almost always cheaper than paying cash.

Which federal law,passed in 1969,requires creditors to state the cost of borrowing in common language?

Banks often encourage you to make the maximum payment.

The CCCS aids families by:

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

You have the right to file your own bankruptcy case and represent yourself at all court hearings.

Frank West wants to borrow money for three years to purchase a new boat.He has been offered a seven percent fixed rate loan and also a variable rate loan that has an initial rate of five percent.By choosing the variable rate loan,Chuck is reducing the lender's risk by:

Chapter 7 bankruptcy is also known as straight bankruptcy.

As a result of the recently passed Health Care and Education Reconciliation Act,federal student loans come directly from:

Two key concepts that you should keep in mind when borrowing are the finance charge and the annual percentage rate.

Membership in credit unions has been:

Float can be defined as:

The fairest method of calculating interest is the adjusted balance method.

Which type of credit insurance repays your debt in the event of a loss of income due to illness or injury?

Which interest formula may be used by creditors to determine how much interest you have paid at any point in a loan?

Which one of the following is not a danger signal of potential debt problems?

If you receive a phone call from a debt collector,he/she must send you a written notice within ____________ days.

If you receive a phone call from a debt collector:

Which one of the following is often the source of the least expensive loan?

The most expensive loans are available from:

Buying on credit is almost always cheaper than paying cash.

Which federal law,passed in 1969,requires creditors to state the cost of borrowing in common language?

Banks often encourage you to make the maximum payment.

The CCCS aids families by:

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