A) is a free benefit on most credit cards. B) can be used to pay off all debt when a creditor becomes unemployed. C) is a good substitute for health and disability insurance. D) can cover monthly credit repayments if a consumer cannot work. A) is a free benefit on most credit cards. B) can be used to pay off all debt when a creditor becomes unemployed. C) is a good substitute for health and disability insurance. D) can cover monthly credit repayments if a consumer cannot work.

A) gives the lender additional recourse if the payments are not made. B) is used on unsecured loans. C) increases the interest rate on loans. D) is required on all loans except revolving credit. A) gives the lender additional recourse if the payments are not made. B) is used on unsecured loans. C) increases the interest rate on loans. D) is required on all loans except revolving credit.

Exam 2: Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

The worst outcome from identity theft is that you could be responsible for charges someone made fraudulently on your credit card.

Free

(True/False)

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(38)

Question 1

Correct Answer:

Verified

False

Beth wants to borrow $18 000 for five years and she has a choice of two loans.One carries an annual rate of 10 percent and the other a 9.5 percent rate compounded semi-annually.Which is her best choice? Calculate the answer by comparing the effective annual rates of interest.

Free

(Essay)

4.7/5

(41)

Question 2

Correct Answer:

Verified

Math calculations are required to compute the effective annual rate of 9.5 percent calculated semi-annually to compare it to the 10 percent annual rate.There are several methods,but here are two solutions.Calculator keystrokes 9.5; second function key; Effective key; 2 = 9.72,or you can calculate by using the formula and calculator.
The formula for effective rate EFF = (1 + (i / n))? - 1.Substituting for the formula:
Effective rate is (1 + (0.095/2))squared -1 = 1.0475 squared -1 = 0.0972 or 9.72 percent.
Keystrokes are 1.0475 2nd function key to the power 2 = 1.09725 - 1 = 9.72.

If you have a poor credit score,there may be lenders willing to loan you money but at a higher interest rate.

Free

(True/False)

4.9/5

(37)

Question 3

Correct Answer:

Verified

True

If a person obtains your credit card number by standing close enough to you to either see your credit card or hear you speak the number during a telephone call,he or she is

(Multiple Choice)

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Question 4

Which of the following is a true statement about student loans?

(Multiple Choice)

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Question 5

Acquiring and using a credit card is an excellent way to start building your credit history.

(True/False)

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Question 6

Harry purchased his condo for $330 000 and now the appraised value is $360000.His outstanding mortgage is $228 000.What is the maximum home equity line of credit Harry would qualify for?

(Multiple Choice)

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Question 7

A person can be declared insolvent if

(Multiple Choice)

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Question 8

Sue obtains a one year loan of $3000 based on an annual interest rate of 12 percent.What would be the monthly payment to pay it off in one year?

(Multiple Choice)

4.8/5

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Question 9

Jacob needs to borrow $19 000 to purchase a car.If the interest rate is seven percent compounded monthly,which of the following is true when considering a five,seven or ten year term?

(Multiple Choice)

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Question 10

If Brian has a home worth $400 000 and a mortgage of $200 000,he should be able to get a HELOC for $160 000 at a better interest rate than if he got an unsecured line of credit.

(True/False)

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Question 11

Credit insurance

(Multiple Choice)

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Question 12

The advantage of leasing over purchasing a vehicle is

(Multiple Choice)

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Question 13

Collateral

(Multiple Choice)

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Question 14

In making the purchase versus lease decision,it is important to remember that

(Multiple Choice)

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Question 15

If you were charged the maximum legal rate of interest on a $1000 loan for one year,the interest cost would be $60.

(True/False)

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Question 16

Which of the following can be used by a creditor in deciding whether or not to grant credit?

(Multiple Choice)

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Question 17

A 20 percent annual interest rate on a $10 000 loan amortized over five-years would result in interest charges of $10 000.

(True/False)

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Question 18

Which would be the best loan offer? Loan A has a 9.5 percent rate calculated quarterly and Loan B has a 9.25 percent rate calculated monthly.

(Multiple Choice)

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Question 19

Revolving open-end credit typically does not specify a maximum amount that can be borrowed.

(True/False)

4.9/5

(39)

Question 20

Showing 1 - 20 of 98

The worst outcome from identity theft is that you could be responsible for charges someone made fraudulently on your credit card.

Beth wants to borrow $18 000 for five years and she has a choice of two loans.One carries an annual rate of 10 percent and the other a 9.5 percent rate compounded semi-annually.Which is her best choice? Calculate the answer by comparing the effective annual rates of interest.

If you have a poor credit score,there may be lenders willing to loan you money but at a higher interest rate.

If a person obtains your credit card number by standing close enough to you to either see your credit card or hear you speak the number during a telephone call,he or she is

Which of the following is a true statement about student loans?

Acquiring and using a credit card is an excellent way to start building your credit history.

Harry purchased his condo for $330 000 and now the appraised value is $360000.His outstanding mortgage is $228 000.What is the maximum home equity line of credit Harry would qualify for?

A person can be declared insolvent if

Sue obtains a one year loan of $3000 based on an annual interest rate of 12 percent.What would be the monthly payment to pay it off in one year?

Jacob needs to borrow $19 000 to purchase a car.If the interest rate is seven percent compounded monthly,which of the following is true when considering a five,seven or ten year term?

If Brian has a home worth $400 000 and a mortgage of $200 000,he should be able to get a HELOC for $160 000 at a better interest rate than if he got an unsecured line of credit.

Credit insurance

The advantage of leasing over purchasing a vehicle is

Collateral

In making the purchase versus lease decision,it is important to remember that

If you were charged the maximum legal rate of interest on a $1000 loan for one year,the interest cost would be $60.

Which of the following can be used by a creditor in deciding whether or not to grant credit?

A 20 percent annual interest rate on a $10 000 loan amortized over five-years would result in interest charges of $10 000.

Which would be the best loan offer? Loan A has a 9.5 percent rate calculated quarterly and Loan B has a 9.25 percent rate calculated monthly.

Revolving open-end credit typically does not specify a maximum amount that can be borrowed.

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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