Question 1

The debt-payment-to-income ratio is calculated by dividing your total liabilities by your net worth.

Accepted Answer

A) True 
 B)False

Question 2

A FICO score of 700 would be considered

Accepted Answer

A)  poor 
B)  very poor 
C)  a risk to default 
D)  very good 
E)  fair 
A)  poor 
B)  very poor 
C)  a risk to default 
D)  very good 
E)  fair

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Which of these is not a true statement? To avoid online fraud, you should __________.

Accepted Answer

A)  keep your personal information private. 
B)  review your monthly bank and credit card statements. 
C)  give your password only to your internet service provider. 
D)  use a secure browser. 
E)  give payment information only to know known businesses. 
A)  keep your personal information private. 
B)  review your monthly bank and credit card statements. 
C)  give your password only to your internet service provider. 
D)  use a secure browser. 
E)  give payment information only to know known businesses.

Question 5

A line of credit is considered a form of revolving credit.

Accepted Answer

A) True 
 B)False

Question 6

A home equity loan is based only on the amount you still owe on your mortgage.

Accepted Answer

A) True 
 B)False

Question 7

If you cosign a loan, all of the following are true except,

Accepted Answer

A)  you are being asked to guarantee the debt. 
B)  it is your legal responsibility to pay the debt. 
C)  you'll have to pay only a portion of the debt if the borrower does not pay. 
D)  the creditor must first try to collect from the borrower. 
E)  the creditor can garnish your wages. 
A)  you are being asked to guarantee the debt. 
B)  it is your legal responsibility to pay the debt. 
C)  you'll have to pay only a portion of the debt if the borrower does not pay. 
D)  the creditor must first try to collect from the borrower. 
E)  the creditor can garnish your wages.

Question 8

In determining your credit capacity, you first provide for basic necessities, such as

Accepted Answer

A)  furniture. 
B)  home furnishings. 
C)  mortgage or rent. 
D)  automobile. 
E)  durable goods. 
A)  furniture. 
B)  home furnishings. 
C)  mortgage or rent. 
D)  automobile. 
E)  durable goods.

Question 9

A line of credit is the maximum dollar amount of credit the lender has made available to you.

Accepted Answer

A) True 
 B)False

Question 10

Generally, most of the information in your credit file may be reported for only 3 years.

Accepted Answer

A) True 
 B)False

Question 11

How do creditors determine your credit-worthiness?

Accepted Answer

Creditors determine credit wor

Question 12

A credit file is a report which includes the individual's present employer and position, former employer(s), public records and a list of cheques returned for insufficient funds.

Accepted Answer

A) True 
 B)False

Question 13

When a creditor looks at the borrower's attitude toward credit obligations, which of the 5 Cs of credit is she analyzing?

Accepted Answer

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

Question 14

If you think your bill is wrong, you must notify your creditor in writing within 15 days after the bill was mailed.

Accepted Answer

A) True 
 B)False

Question 15

Which of these is not a financing option for the purchase of a car?

Accepted Answer

A)  factory financing 
B)  line of credit 
C)  conditional sales contract 
D)  installment loan 
E)  cash 
A)  factory financing 
B)  line of credit 
C)  conditional sales contract 
D)  installment loan 
E)  cash

Question 16

A personal line of credit is a

Accepted Answer

A)  credit arrangement that has no extra costs. 
B)  prearranged loan for a specified amount that you can use by writing a special check. 
C)  credit arrangement that has no specific repayment plan. 
D)  synonym for installment cash credit. 
E)  synonym for single lump-sum credit. 
A)  credit arrangement that has no extra costs. 
B)  prearranged loan for a specified amount that you can use by writing a special check. 
C)  credit arrangement that has no specific repayment plan. 
D)  synonym for installment cash credit. 
E)  synonym for single lump-sum credit.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Credit should not be considered a substitute for cash.

Accepted Answer

A) True 
 B)False

Question 19

When did installment credit explode on the North American scene?

Accepted Answer

A)  Just after World War II 
B)  with the advent of television in the late 1940s 
C)  with the advent of the automobile in the early 1900s 
D)  during the recession of the 1950s 
E)  during the inflation of the 1970s 
A)  Just after World War II 
B)  with the advent of television in the late 1940s 
C)  with the advent of the automobile in the early 1900s 
D)  during the recession of the 1950s 
E)  during the inflation of the 1970s

Question 20

A home equity loan is usually set up as a revolving line of credit, typically with a variable interest rate.

Accepted Answer

A) True 
 B)False

The debt-payment-to-income ratio is calculated by dividing your total liabilities by your net worth.

A FICO score of 700 would be considered

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

Which of these is not a true statement? To avoid online fraud, you should __________.

A line of credit is considered a form of revolving credit.

A home equity loan is based only on the amount you still owe on your mortgage.

If you cosign a loan, all of the following are true except,

In determining your credit capacity, you first provide for basic necessities, such as

A line of credit is the maximum dollar amount of credit the lender has made available to you.

Generally, most of the information in your credit file may be reported for only 3 years.

How do creditors determine your credit-worthiness?

A credit file is a report which includes the individual's present employer and position, former employer(s), public records and a list of cheques returned for insufficient funds.

When a creditor looks at the borrower's attitude toward credit obligations, which of the 5 Cs of credit is she analyzing?

If you think your bill is wrong, you must notify your creditor in writing within 15 days after the bill was mailed.

Which of these is not a financing option for the purchase of a car?

A personal line of credit is a

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

Credit should not be considered a substitute for cash.

When did installment credit explode on the North American scene?

A home equity loan is usually set up as a revolving line of credit, typically with a variable interest rate.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Choosing a Source Credit: the Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters

Exam 5: Introduction to Consumer Credit

The debt-payment-to-income ratio is calculated by dividing your total liabilities by your net worth.

A FICO score of 700 would be considered

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

Which of these is not a true statement? To avoid online fraud, you should __________.

A line of credit is considered a form of revolving credit.

A home equity loan is based only on the amount you still owe on your mortgage.

If you cosign a loan, all of the following are true except,

In determining your credit capacity, you first provide for basic necessities, such as

A line of credit is the maximum dollar amount of credit the lender has made available to you.

Generally, most of the information in your credit file may be reported for only 3 years.

How do creditors determine your credit-worthiness?

A credit file is a report which includes the individual's present employer and position, former employer(s), public records and a list of cheques returned for insufficient funds.

When a creditor looks at the borrower's attitude toward credit obligations, which of the 5 Cs of credit is she analyzing?

If you think your bill is wrong, you must notify your creditor in writing within 15 days after the bill was mailed.

Which of these is not a financing option for the purchase of a car?

A personal line of credit is a

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

Credit should not be considered a substitute for cash.

When did installment credit explode on the North American scene?

A home equity loan is usually set up as a revolving line of credit, typically with a variable interest rate.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Choosing a Source Credit: the Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters