Question 1

Using email messages from a legitimate source to obtain account information for the purpose of identity theft is referred to as

Accepted Answer

A) pharming. 
B) phishing. 
C) skimming. 
D) trolling.

Question 2

Posing as an employee of a financial institution to obtain information for purposes of identity theft is an example of pretexting.

Accepted Answer

A) True 
 B)False

Question 3

From a borrower's perspective,all else the same,a longer-term loan

Accepted Answer

A) costs more in interest. 
B) increases the size of monthly payments. 
C) decreases the size of monthly payments so costs less in interest. 
D) is most cost effective in the long run.

Question 4

Illustrate the cost implications of using a credit card with 21 percent interest charges versus a line of credit with five percent interest charges to fund a $10 000 purchase.In one case,assume you only have $250 per month you can allocate to paying off the debt.In the second case assume you need to get the debt paid off in five years.

Accepted Answer

The answer of Illustrate the cost implications of using a...

Question 5

A BEACON score of 820 indicates a person has a high likelihood of paying back debt as expected.

Accepted Answer

A) True 
 B)False

Question 6

Credit insurance will pay off all your credit card debt when you cannot work due to accident or illness.

Accepted Answer

A) True 
 B)False

Question 7

The risk in co-signing on a loan for a friend is not significant,as you are not the primary borrower.

Accepted Answer

A) True 
 B)False

Question 8

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.

Accepted Answer

A) The effective rate on Loan A is 9.84 percent and on Loan B is 9.92.percent.Therefore,Loan A is best. 
B) The effective rate on Loan A is 9.84 percent and on Loan B is 9.65 percent.Therefore,Loan B is best. 
C) Loan B is a lower interest rate,so it is the better choice. 
D) Loan A is compounded less frequently,so it would be the best option.

Question 9

What would be the total cost of leasing a vehicle for four years that requires a security deposit of $1000 (which would be withdrawn from your portfolio,which earns nine percent per year),has monthly lease payments of $500,and has a kilometer restriction of 20 000 with excess kilometers resulting in a charge of 10 cents per kilometer? (Assume that,over the life of the lease,you exceed the kilometer limit by 8000. )

Accepted Answer

A) $24 420 
B) $24 360 
C) $24 800 
D) $25 160

Question 10

Someone with a poor credit rating might be offered a credit card with a 28 percent interest rate while someone with a high credit rating may be offered 21 percent.

Accepted Answer

A) True 
 B)False

Question 11

The best policy regarding credit is

Accepted Answer

A) always go for the highest credit limit possible. 
B) always make the minimum payment. 
C) maximize debt payments based on your cash flow. 
D) take steps to increase your credit score.

Question 12

The term amortized refers to

Accepted Answer

A) the method by which interest is calculated in a loan contract. 
B) the repayment of a loan through a series of equal payments. 
C) the loan maturity date in a loan contract.. 
D) the term contracted to pay off a loan.

Question 13

If your only credit is a credit card with a $15 000 limit which you've had for ten years,and you keep your balance below $2000 and always pay at least the minimum due,you will have a good credit rating.

Accepted Answer

A) True 
 B)False

Question 14

Revolving credit means

Accepted Answer

A) the loan balance will fluctuate based on the amount used. 
B) the interest rate will revolve above the prime rate. 
C) it is a credit card. 
D) it is a mortgage.

Question 15

The item that receives the most weight in the BEACON credit scoring system is

Accepted Answer

A) the amount of credit used each month. 
B) credit payment history. 
C) credit use. 
D) the total amount of credit.

Question 16

A proposal to creditors is made by an insolvent debtor having difficulty meeting payments.Which of the following is True?

Accepted Answer

A) The proposal must be rejected by creditors within 45 days,or it will be deemed to be accepted. 
B) The history will remain on the credit bureau report for three years after terms have been met. 
C) The proposal must be for an amount over $50 000. 
D) The proposal must require at least fifty percent of the total debt to be repaid.

Question 17

In evaluating a borrower's creditworthiness,income and expenses are carefully reviewed,but assets are not relevant.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

If not objected to by the creditors,a consumer proposal could enable someone with $50 000 in consumer debt to pay off $30 000 of it and have it removed from their credit bureau report.

Accepted Answer

A) True 
 B)False

Question 20

Making extra payments on a loan

Accepted Answer

A) reduces the total interest paid. 
B) frees up cash flow for other expenses. 
C) lengthens the maturity of the loan. 
D) reduces the size of future payments.

Exam 6: Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Using email messages from a legitimate source to obtain account information for the purpose of identity theft is referred to as

Posing as an employee of a financial institution to obtain information for purposes of identity theft is an example of pretexting.

From a borrower's perspective,all else the same,a longer-term loan

A BEACON score of 820 indicates a person has a high likelihood of paying back debt as expected.

Credit insurance will pay off all your credit card debt when you cannot work due to accident or illness.

The risk in co-signing on a loan for a friend is not significant,as you are not the primary borrower.

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.

Someone with a poor credit rating might be offered a credit card with a 28 percent interest rate while someone with a high credit rating may be offered 21 percent.

The best policy regarding credit is

The term amortized refers to

If your only credit is a credit card with a $15 000 limit which you've had for ten years,and you keep your balance below $2000 and always pay at least the minimum due,you will have a good credit rating.

Revolving credit means

The item that receives the most weight in the BEACON credit scoring system is

A proposal to creditors is made by an insolvent debtor having difficulty meeting payments.Which of the following is True?

In evaluating a borrower's creditworthiness,income and expenses are carefully reviewed,but assets are not relevant.

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

If not objected to by the creditors,a consumer proposal could enable someone with $50 000 in consumer debt to pay off $30 000 of it and have it removed from their credit bureau report.

Making extra payments on a loan