Question 1

Credit is an arrangement to receive cash,goods,or services now and pay for them in the future.

Accepted Answer

A) True 
 B)False

Question 2

In the near future,smart cards will provide a crucial link between the World Wide Web and the physical world.

Accepted Answer

A) True 
 B)False

Question 3

Consumer credit is based on trust in people's ability and willingness to pay bills when due.

Accepted Answer

A) True 
 B)False

Question 4

Most consumers have only one choice in financing current purchases.

Accepted Answer

A) True 
 B)False

Question 5

Department stores and gasoline companies are good places to obtain your first credit card.

Accepted Answer

A) True 
 B)False

Question 6

With an open-end credit,you pay back one-time loans in a specified period of time in equal amounts.

Accepted Answer

A) True 
 B)False

Question 7

When you cosign a loan,you are being asked to guarantee this debt.

Accepted Answer

A) True 
 B)False

Question 8

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 9

A valuable asset pledged to assure loan payments and subject to seizure upon default is called

Accepted Answer

A)  capacity. 
B)  character. 
C)  capital. 
D)  collateral. 
E)  conditions. 
A)  capacity. 
B)  character. 
C)  capital. 
D)  collateral. 
E)  conditions.

Question 10

Financing from car dealers in affiliation with financial institutions is called factory financing.

Accepted Answer

A) True 
 B)False

Question 11

A home equity loan is a good source of credit for daily expenses.

Accepted Answer

A) True 
 B)False

Question 12

Debt payments-to-income ratio is

Accepted Answer

A)  calculated by dividing total liabilities by net worth. 
B)  calculated by dividing monthly debt payments (not including house payments)by net monthly income. 
C)  determined by dividing your assets into liabilities. 
D)  a useless ratio for determining your credit capacity. 
E)  rarely used by creditors in determining credit worthiness. 
A)  calculated by dividing total liabilities by net worth. 
B)  calculated by dividing monthly debt payments (not including house payments)by net monthly income. 
C)  determined by dividing your assets into liabilities. 
D)  a useless ratio for determining your credit capacity. 
E)  rarely used by creditors in determining credit worthiness.

Question 13

In evaluating your credit application,a lender may

Accepted Answer

A)  ask your age. 
B)  want to know if you are on public assistance. 
C)  require your marriage certificate. 
D)  ask if you are married or divorced. 
E)  ask your race and nationality. 
A)  ask your age. 
B)  want to know if you are on public assistance. 
C)  require your marriage certificate. 
D)  ask if you are married or divorced. 
E)  ask your race and nationality.

Question 14

If your debt-to-equity ratio is about 1,you have probably reached the upper limit of debt obligations.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)  7 
B)  9 
C)  11 
D)  13 
E)  15 
A)  7 
B)  9 
C)  11 
D)  13 
E)  15

Question 16

Cobranding has become increasingly unpopular since General Motors launched its credit card in 1992.

Accepted Answer

A) True 
 B)False

Question 17

Although credit permits more immediate satisfaction of needs and desires,it

Accepted Answer

A)  does increase total purchasing power. 
B)  is always best to avoid credit purchases. 
C)  does not diminish your ability to buy more goods and services on credit. 
D)  has no opportunity costs attached to it. 
E)  does not increase total purchasing power 
A)  does increase total purchasing power. 
B)  is always best to avoid credit purchases. 
C)  does not diminish your ability to buy more goods and services on credit. 
D)  has no opportunity costs attached to it. 
E)  does not increase total purchasing power

Question 18

If you think that your bill is wrong,you should first

Accepted Answer

A)  contact the local credit bureau and inform it of the billing error. 
B)  complain to the Better Business Bureau. 
C)  contact your provincial consumer protection agency. 
D)  notify the creditor of the error. 
E)  contact your attorney to settle the matter. 
A)  contact the local credit bureau and inform it of the billing error. 
B)  complain to the Better Business Bureau. 
C)  contact your provincial consumer protection agency. 
D)  notify the creditor of the error. 
E)  contact your attorney to settle the matter.

Question 19

If you cosign a loan,

Accepted Answer

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

Question 20

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

Accepted Answer

A) True 
 B)False

Credit is an arrangement to receive cash,goods,or services now and pay for them in the future.

In the near future,smart cards will provide a crucial link between the World Wide Web and the physical world.

Consumer credit is based on trust in people's ability and willingness to pay bills when due.

Most consumers have only one choice in financing current purchases.

Department stores and gasoline companies are good places to obtain your first credit card.

With an open-end credit,you pay back one-time loans in a specified period of time in equal amounts.

When you cosign a loan,you are being asked to guarantee this debt.

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

A valuable asset pledged to assure loan payments and subject to seizure upon default is called

Financing from car dealers in affiliation with financial institutions is called factory financing.

A home equity loan is a good source of credit for daily expenses.

Debt payments-to-income ratio is

In evaluating your credit application,a lender may

If your debt-to-equity ratio is about 1,you have probably reached the upper limit of debt obligations.

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

Cobranding has become increasingly unpopular since General Motors launched its credit card in 1992.

Although credit permits more immediate satisfaction of needs and desires,it

If you think that your bill is wrong,you should first

If you cosign a loan,

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

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Accounts

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Daily Spending Diary

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

Credit is an arrangement to receive cash,goods,or services now and pay for them in the future.

In the near future,smart cards will provide a crucial link between the World Wide Web and the physical world.

Consumer credit is based on trust in people's ability and willingness to pay bills when due.

Most consumers have only one choice in financing current purchases.

Department stores and gasoline companies are good places to obtain your first credit card.

With an open-end credit,you pay back one-time loans in a specified period of time in equal amounts.

When you cosign a loan,you are being asked to guarantee this debt.

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

A valuable asset pledged to assure loan payments and subject to seizure upon default is called

Financing from car dealers in affiliation with financial institutions is called factory financing.

A home equity loan is a good source of credit for daily expenses.

Debt payments-to-income ratio is

In evaluating your credit application,a lender may

If your debt-to-equity ratio is about 1,you have probably reached the upper limit of debt obligations.

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

Cobranding has become increasingly unpopular since General Motors launched its credit card in 1992.

Although credit permits more immediate satisfaction of needs and desires,it

If you think that your bill is wrong,you should first

If you cosign a loan,

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

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Accounts

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Daily Spending Diary

Filters