Question 1

You can lend money to micro-entrepreneurs through Kiva.org, a micro-lending website.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Under Chapter 7 of the U.S. bankruptcy code,

Accepted Answer

A)  All debts are forgiven. 
B)  Alimony and child support debts are released. 
C)  Certain assets receive some protection. 
D)  Certain debts arising from educational loans 
E)  Debt arising from driving while intoxicated is forgiven. 
A)  All debts are forgiven. 
B)  Alimony and child support debts are released. 
C)  Certain assets receive some protection. 
D)  Certain debts arising from educational loans 
E)  Debt arising from driving while intoxicated is forgiven.

Question 4

Which of the following is a valid reason for using credit?

Accepted Answer

A)  Purchasing a car so a homemaker can return to work 
B)  Borrowing for a college education 
C)  Purchasing an item that costs less now than it will later 
D)  Paying for a medical emergency 
E)  All of these are valid reasons for borrowing 
A)  Purchasing a car so a homemaker can return to work 
B)  Borrowing for a college education 
C)  Purchasing an item that costs less now than it will later 
D)  Paying for a medical emergency 
E)  All of these are valid reasons for borrowing

Question 5

Most information in your credit file (except bankruptcies) may be reported for only 7 years.

Accepted Answer

A) True 
 B)False

Question 6

A line of credit is

Accepted Answer

A)  The equal payments required for one-time loans. 
B)  The loan amount for installment cash credit. 
C)  The maximum loan amount for closed-end credit. 
D)  The maximum dollar amount of credit the lender has made available to a borrower. 
E)  The monthly payment required for single lump-sum credit. 
A)  The equal payments required for one-time loans. 
B)  The loan amount for installment cash credit. 
C)  The maximum loan amount for closed-end credit. 
D)  The maximum dollar amount of credit the lender has made available to a borrower. 
E)  The monthly payment required for single lump-sum credit.

Question 7

If you have reached the upper limit of debt obligations, your debt-to-equity ratio is about

Accepted Answer

A)  0. 
B)  0.2. 
C)  0.25. 
D)  0.5. 
E)  1. 
A)  0. 
B)  0.2. 
C)  0.25. 
D)  0.5. 
E)  1.

Question 8

A credit report includes

Accepted Answer

A)  Detailed credit information 
B)  Bank statements 
C)  All previous employers 
D)  Credit card statements 
E)  All of these. 
A)  Detailed credit information 
B)  Bank statements 
C)  All previous employers 
D)  Credit card statements 
E)  All of these.

Question 9

Before taking out a loan, you should ask yourself whether you can meet all of your essential expenses and still afford the monthly loan payments. This can be determined by

Accepted Answer

A)  Adding up basic monthly expenses then adding this total to take-home pay. 
B)  Asking what you plan to purchase with the loan 
C)  Multiplying your take-home pay by 50% and subtracting your current loan payments. 
D)  Adding up basic monthly expensesand subtracting this total from take-home pay, plus figuring out what to give up to make the monthly loan payment. 
E)  None of the above 
A)  Adding up basic monthly expenses then adding this total to take-home pay. 
B)  Asking what you plan to purchase with the loan 
C)  Multiplying your take-home pay by 50% and subtracting your current loan payments. 
D)  Adding up basic monthly expensesand subtracting this total from take-home pay, plus figuring out what to give up to make the monthly loan payment. 
E)  None of the above

Question 10

Personal bankruptcy can be filed under which section(s) of the U.S. bankruptcy code?

Accepted Answer

A)  Chapter 7 
B)  Chapter 11 
C)  Chapter 13 
D)  Chapters 7 and 13 
E)  Chapters 11 and 13 
A)  Chapter 7 
B)  Chapter 11 
C)  Chapter 13 
D)  Chapters 7 and 13 
E)  Chapters 11 and 13

Question 11

Which of the following acts sets procedures for promptly correcting billing mistakes, refusing to make credit card or revolving credit payments on defective goods, and promptly crediting your payments?

Accepted Answer

A)  Experian Act of 1982 
B)  Fair Credit Reporting Act of 2009 
C)  Bills and Disputes Act of 1963 
D)  Equifax Act of 1979 
E)  Fair Credit Billing Act of 1975 
A)  Experian Act of 1982 
B)  Fair Credit Reporting Act of 2009 
C)  Bills and Disputes Act of 1963 
D)  Equifax Act of 1979 
E)  Fair Credit Billing Act of 1975

Question 12

Sam is comparing the costs of two loans. One is due in one year and the other is due in four years. Both have the same stated rate of interest. Which of the following is true?

Accepted Answer

A)  The principal paid for the one-year loan will be lower than the principal paid for the four-year loan. 
B)  The principal paid for the one-year loan will be higher than the principal paid for the four-year loan. 
C)  The interest charges for the one-year loan will be lower than the interest charges for the four-year loan. 
D)  The interest charges for the one-year loan will be higher than the interest charges for the four-year loan. 
E)  The interest charges and principal payments cannot be compared for the two loans. 
A)  The principal paid for the one-year loan will be lower than the principal paid for the four-year loan. 
B)  The principal paid for the one-year loan will be higher than the principal paid for the four-year loan. 
C)  The interest charges for the one-year loan will be lower than the interest charges for the four-year loan. 
D)  The interest charges for the one-year loan will be higher than the interest charges for the four-year loan. 
E)  The interest charges and principal payments cannot be compared for the two loans.

Question 13

If you are denied credit, you can contact the credit bureau and ask for a copy of your credit report. The bureau cannot charge a fee for this service as long as you ask to see your files within of notification that your credit application has been denied.

Accepted Answer

A)  10 days. 
B)  20 days. 
C)  30 days. 
D)  60 days. 
E)  90 days. 
A)  10 days. 
B)  20 days. 
C)  30 days. 
D)  60 days. 
E)  90 days.

Question 14

In the five Cs of credit, character refers to the borrower's trustworthiness and stability.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is an example of closed-end credit?

Accepted Answer

A)  A mortgage loan. 
B)  A department store credit card. 
C)  Overdraft protection. 
D)  Travel and entertainment cards 
E)  All of these are examples of closed-end credit. 
A)  A mortgage loan. 
B)  A department store credit card. 
C)  Overdraft protection. 
D)  Travel and entertainment cards 
E)  All of these are examples of closed-end credit.

Question 16

Which of the following is the only online source authorized to provide you with a free copy of your credit report annually? Which of the following is the only online source authorized to provide you with a free copy of your credit report annually?

Accepted Answer

A)  www.annualcreditscore.com 
B)  www.freecreditreport.com 
C)  www.onlinecreditreport.com 
D)  www.freecreditscore.com 
E)  www.annualcreditreport.com 
A)  www.annualcreditscore.com 
B)  www.freecreditreport.com 
C)  www.onlinecreditreport.com 
D)  www.freecreditscore.com 
E)  www.annualcreditreport.com

Question 17

According to law, a creditor may threaten your credit rating while you are negotiating a billing dispute.

Accepted Answer

A) True 
 B)False

Question 18

The longer the term for a loan at a given interest rate, the greater the amount you must pay in interest charges.

Accepted Answer

A) True 
 B)False

Question 19

Consumer credit

Accepted Answer

A)  Is only a privilege of the affluent. 
B)  Dates back to colonial times. 
C)  Has been declining since the 1900s. 
D)  Is not a major force in our economy. 
E)  Is currently only used by farmers 
A)  Is only a privilege of the affluent. 
B)  Dates back to colonial times. 
C)  Has been declining since the 1900s. 
D)  Is not a major force in our economy. 
E)  Is currently only used by farmers

Question 20

Carrie thought she misplaced her checkbook for a few days. When she found it, she noticed that two checks, her cash, and her debit card were missing. She immediately thought about the increase in identity theft in her area and decided to take some action. She should take all of the following steps except

Accepted Answer

A)  Stop payment on the missing checks. 
B)  Cancel her debit card. 
C)  Get a new debit card with a new personal identification number (PIN). 
D)  Close her bank account and open a new one. 
E)  All of these steps are appropriate to take if she suspects identity theft. 
A)  Stop payment on the missing checks. 
B)  Cancel her debit card. 
C)  Get a new debit card with a new personal identification number (PIN). 
D)  Close her bank account and open a new one. 
E)  All of these steps are appropriate to take if she suspects identity theft.

You can lend money to micro-entrepreneurs through Kiva.org, a micro-lending website.

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

Under Chapter 7 of the U.S. bankruptcy code,

Which of the following is a valid reason for using credit?

Most information in your credit file (except bankruptcies) may be reported for only 7 years.

A line of credit is

If you have reached the upper limit of debt obligations, your debt-to-equity ratio is about

A credit report includes

Before taking out a loan, you should ask yourself whether you can meet all of your essential expenses and still afford the monthly loan payments. This can be determined by

Personal bankruptcy can be filed under which section(s) of the U.S. bankruptcy code?

Which of the following acts sets procedures for promptly correcting billing mistakes, refusing to make credit card or revolving credit payments on defective goods, and promptly crediting your payments?

Sam is comparing the costs of two loans. One is due in one year and the other is due in four years. Both have the same stated rate of interest. Which of the following is true?

If you are denied credit, you can contact the credit bureau and ask for a copy of your credit report. The bureau cannot charge a fee for this service as long as you ask to see your files within of notification that your credit application has been denied.

In the five Cs of credit, character refers to the borrower's trustworthiness and stability.

Which of the following is an example of closed-end credit?

Which of the following is the only online source authorized to provide you with a free copy of your credit report annually? Which of the following is the only online source authorized to provide you with a free copy of your credit report annually?

According to law, a creditor may threaten your credit rating while you are negotiating a billing dispute.

The longer the term for a loan at a given interest rate, the greater the amount you must pay in interest charges.

Consumer credit

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters

Exam 5: Consumer Credit: Advantages, Disadvantages, Sources, and Costs

You can lend money to micro-entrepreneurs through Kiva.org, a micro-lending website.

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

Under Chapter 7 of the U.S. bankruptcy code,

Which of the following is a valid reason for using credit?

Most information in your credit file (except bankruptcies) may be reported for only 7 years.

A line of credit is

If you have reached the upper limit of debt obligations, your debt-to-equity ratio is about

A credit report includes

Before taking out a loan, you should ask yourself whether you can meet all of your essential expenses and still afford the monthly loan payments. This can be determined by

Personal bankruptcy can be filed under which section(s) of the U.S. bankruptcy code?

Which of the following acts sets procedures for promptly correcting billing mistakes, refusing to make credit card or revolving credit payments on defective goods, and promptly crediting your payments?

Sam is comparing the costs of two loans. One is due in one year and the other is due in four years. Both have the same stated rate of interest. Which of the following is true?

If you are denied credit, you can contact the credit bureau and ask for a copy of your credit report. The bureau cannot charge a fee for this service as long as you ask to see your files within of notification that your credit application has been denied.

In the five Cs of credit, character refers to the borrower's trustworthiness and stability.

Which of the following is an example of closed-end credit?

Which of the following is the only online source authorized to provide you with a free copy of your credit report annually? Which of the following is the only online source authorized to provide you with a free copy of your credit report annually?

According to law, a creditor may threaten your credit rating while you are negotiating a billing dispute.

The longer the term for a loan at a given interest rate, the greater the amount you must pay in interest charges.

Consumer credit

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Saving Plans and Payment Accounts

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Insurance

Financial Planning With Life Insurance

Investing Fundamentals and Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters