Question 1

Which of the following is a disadvantage of using a debit card?

Accepted Answer

A)  The consumer is charged higher finance charges than on a credit card. 
B)  The consumer loses float. 
C)  They have higher processing costs than ATMs. 
D)  They have lower processing costs than checks. 
E)  They are not widely available. 
A)  The consumer is charged higher finance charges than on a credit card. 
B)  The consumer loses float. 
C)  They have higher processing costs than ATMs. 
D)  They have lower processing costs than checks. 
E)  They are not widely available.

Question 2

Banks labeled "consumer lenders" have the heaviest concentration of loans in credit cards.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following would be considered an unacceptable consumer loan?

Accepted Answer

A)  A home improvement loan, secured by a first mortgage 
B)  A home improvement loan, secured by a second mortgage 
C)  A $10,000 loan on a new $30,000 boat, secured by the boat 
D)  A loan on for 80% of the value on a new automobile, secured by the automobile 
E)  A loan for 95% of the value of used skydiving equipment, secured by the equipment 
A)  A home improvement loan, secured by a first mortgage 
B)  A home improvement loan, secured by a second mortgage 
C)  A $10,000 loan on a new $30,000 boat, secured by the boat 
D)  A loan on for 80% of the value on a new automobile, secured by the automobile 
E)  A loan for 95% of the value of used skydiving equipment, secured by the equipment

Question 4

Who is at risk if an indirect loan defaults on a loan with full recourse?

Accepted Answer

A)  The bank 
B)  The borrower 
C)  The dealer 
D)  The credit bureau 
E)  All of the above 
A)  The bank 
B)  The borrower 
C)  The dealer 
D)  The credit bureau 
E)  All of the above

Question 5

Which of the following are two of the "additional Cs" of consumer credit?

Accepted Answer

A)  Customer relationships and Character 
B)  Competition and Continuous employment 
C)  Continuous employment and Character 
D)  Customer relationships and Competition 
E)  Competition and Character 
A)  Customer relationships and Character 
B)  Competition and Continuous employment 
C)  Continuous employment and Character 
D)  Customer relationships and Competition 
E)  Competition and Character

Question 6

Which is more expensive for a bank: 1. Making a loan to a customer that does not pay the loan back? or 2. Denying a loan to someone who would have paid the bank? Explain your answer.

Accepted Answer

Making a loan to a customer who does not

Question 7

Discuss the 5 C's of credit and what they mean in evaluating a loan application.

Accepted Answer

The 5 C's of credit are character, capac

Question 8

Credit scoring models are less objective than judgmental evaluations.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following are lenders prohibited from asking on a credit application?

Accepted Answer

A)  The applicant's income 
B)  If the applicant has a telephone 
C)  If the applicant has declared bankruptcy in the past 
D)  How long the applicant has been on the job 
E)  Lenders are not prohibited from asking any of the above 
A)  The applicant's income 
B)  If the applicant has a telephone 
C)  If the applicant has declared bankruptcy in the past 
D)  How long the applicant has been on the job 
E)  Lenders are not prohibited from asking any of the above

Question 10

Consumer loans differ from commercial loans in all of the following ways except:

Accepted Answer

A)  consumer loans are generally smaller than commercial loans. 
B)  consumer loans are generally for longer terms than commercial loans. 
C)  consumer loans are generally less expensive to administer on a unit basis than commercial loans. 
D)  individuals are more likely to default than businesses. 
E)  consumer loans in some states are still covered by usury laws. 
A)  consumer loans are generally smaller than commercial loans. 
B)  consumer loans are generally for longer terms than commercial loans. 
C)  consumer loans are generally less expensive to administer on a unit basis than commercial loans. 
D)  individuals are more likely to default than businesses. 
E)  consumer loans in some states are still covered by usury laws.

Question 11

Consumer loans are typically very similar such that a comprehensive analytical format can be used for all loans.

Accepted Answer

A) True 
 B)False

Question 12

The vast majority of credit card revenues comes from:

Accepted Answer

A)  merchant discounts. 
B)  net credit gains. 
C)  advertising revenue. 
D)  interest income and annual fees. 
E)  interchange fees. 
A)  merchant discounts. 
B)  net credit gains. 
C)  advertising revenue. 
D)  interest income and annual fees. 
E)  interchange fees.

Question 13

Under current bankruptcy law, which of the following debts are not dischargeable under Chapter 7?

Accepted Answer

A)  Past due child support 
B)  Past due mortgage payments 
C)  Past due credit card payments 
D)  Past due auto loan payments 
E)  All of the above are dischargeable under Chapter 7 bankruptcy law 
A)  Past due child support 
B)  Past due mortgage payments 
C)  Past due credit card payments 
D)  Past due auto loan payments 
E)  All of the above are dischargeable under Chapter 7 bankruptcy law

Question 14

Use the following information for questions 
A bank customer is granted credit for a $2,000 loan at 10% to be repaid in 12 equal installments.
-If the loan is a discount loan, what are the net proceeds of the loan?

Accepted Answer

A)  $2,200 
B)  $2,100 
C)  $2,000 
D)  $1,800 
E)  Cannot be determined 
A)  $2,200 
B)  $2,100 
C)  $2,000 
D)  $1,800 
E)  Cannot be determined

Question 15

Consumers are prohibited from disclosing if they receive public assistance when applying for credit.

Accepted Answer

A) True 
 B)False

Question 16

Redlining is a lending practice of not extending credit:

Accepted Answer

A)  to minimum wage earners. 
B)  to finance low-income housing. 
C)  to students. 
D)  to targeted minority groups. 
E)  within a geographic area that is believed to be deteriorating. 
A)  to minimum wage earners. 
B)  to finance low-income housing. 
C)  to students. 
D)  to targeted minority groups. 
E)  within a geographic area that is believed to be deteriorating.

Question 17

A FICO score summarizes an individual's credit history in one number.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following contains a computer memory chip?

Accepted Answer

A)  Debit card 
B)  Credit card 
C)  Smart card 
D)  Pre-Paid card 
E)  ATM card 
A)  Debit card 
B)  Credit card 
C)  Smart card 
D)  Pre-Paid card 
E)  ATM card

Question 19

The purpose of the Truth in Lending Act of 1968 is to require lenders to quote:

Accepted Answer

A)  home mortgage finance charges in a standardized manner. 
B)  rates on all certificates of deposit in a standardized manner. 
C)  payments with and without credit life insurance. 
D)  consumer loan finance charges in a standardized manner. 
E)  finance charges on loans over $100,000 in a standardized manner. 
A)  home mortgage finance charges in a standardized manner. 
B)  rates on all certificates of deposit in a standardized manner. 
C)  payments with and without credit life insurance. 
D)  consumer loan finance charges in a standardized manner. 
E)  finance charges on loans over $100,000 in a standardized manner.

Question 20

Which of the following had the greatest net interest margin in 2012?

Accepted Answer

A)  International banks 
B)  Agricultural banks 
C)  Credit card lenders 
D)  Consumer lenders 
E)  Mortgage lenders 
A)  International banks 
B)  Agricultural banks 
C)  Credit card lenders 
D)  Consumer lenders 
E)  Mortgage lenders

Which of the following is a disadvantage of using a debit card?

Banks labeled "consumer lenders" have the heaviest concentration of loans in credit cards.

Which of the following would be considered an unacceptable consumer loan?

Who is at risk if an indirect loan defaults on a loan with full recourse?

Which of the following are two of the "additional Cs" of consumer credit?

Which is more expensive for a bank: 1. Making a loan to a customer that does not pay the loan back? or 2. Denying a loan to someone who would have paid the bank? Explain your answer.

Discuss the 5 C's of credit and what they mean in evaluating a loan application.

Credit scoring models are less objective than judgmental evaluations.

Which of the following are lenders prohibited from asking on a credit application?

Consumer loans differ from commercial loans in all of the following ways except:

Consumer loans are typically very similar such that a comprehensive analytical format can be used for all loans.

The vast majority of credit card revenues comes from:

Under current bankruptcy law, which of the following debts are not dischargeable under Chapter 7?

Use the following information for questions A bank customer is granted credit for a $2,000 loan at 10% to be repaid in 12 equal installments. -If the loan is a discount loan, what are the net proceeds of the loan?

Consumers are prohibited from disclosing if they receive public assistance when applying for credit.

Redlining is a lending practice of not extending credit:

A FICO score summarizes an individual's credit history in one number.

Which of the following contains a computer memory chip?

The purpose of the Truth in Lending Act of 1968 is to require lenders to quote:

Which of the following had the greatest net interest margin in 2012?

Banking and the Financial Services Industry

Government Policies and Regulation

Analyzing Bank Performance

Managing Noninterest Income and Noninterest Expense

The Performance of Nontraditional Banking Companies

Pricing Fixed-Income Securities

Managing Interest Rate Risk: Gap and Earnings Sensitivity

Managing Interest Rate Risk: Duration Gap and Economic Value of Equity

Using Derivatives to Manage Interest Rate Risk

Funding the Bank

Managing Liquidity

The Effective Use of Capital

Overview of Credit Policy and Loan Characteristics

Evaluating Commercial Loan Requests and Managing Credit Risk

Managing the Investment Portfolio

Global Banking Activities

Filters

Exam 15: Evaluating Consumer Loans

Which of the following is a disadvantage of using a debit card?

Banks labeled "consumer lenders" have the heaviest concentration of loans in credit cards.

Which of the following would be considered an unacceptable consumer loan?

Who is at risk if an indirect loan defaults on a loan with full recourse?

Which of the following are two of the "additional Cs" of consumer credit?

Which is more expensive for a bank: 1. Making a loan to a customer that does not pay the loan back? or 2. Denying a loan to someone who would have paid the bank? Explain your answer.

Discuss the 5 C's of credit and what they mean in evaluating a loan application.

Credit scoring models are less objective than judgmental evaluations.

Which of the following are lenders prohibited from asking on a credit application?

Consumer loans differ from commercial loans in all of the following ways except:

Consumer loans are typically very similar such that a comprehensive analytical format can be used for all loans.

The vast majority of credit card revenues comes from:

Under current bankruptcy law, which of the following debts are not dischargeable under Chapter 7?

Use the following information for questions A bank customer is granted credit for a $2,000 loan at 10% to be repaid in 12 equal installments. -If the loan is a discount loan, what are the net proceeds of the loan?

Consumers are prohibited from disclosing if they receive public assistance when applying for credit.

Redlining is a lending practice of not extending credit:

A FICO score summarizes an individual's credit history in one number.

Which of the following contains a computer memory chip?

The purpose of the Truth in Lending Act of 1968 is to require lenders to quote:

Which of the following had the greatest net interest margin in 2012?

Banking and the Financial Services Industry

Government Policies and Regulation

Analyzing Bank Performance

Managing Noninterest Income and Noninterest Expense

The Performance of Nontraditional Banking Companies

Pricing Fixed-Income Securities

Managing Interest Rate Risk: Gap and Earnings Sensitivity

Managing Interest Rate Risk: Duration Gap and Economic Value of Equity

Using Derivatives to Manage Interest Rate Risk

Funding the Bank

Managing Liquidity

The Effective Use of Capital

Overview of Credit Policy and Loan Characteristics

Evaluating Commercial Loan Requests and Managing Credit Risk

Managing the Investment Portfolio

Global Banking Activities

Filters