Question 1

Perhaps the greatest disadvantage of using credit is the temptation to overspend.

Accepted Answer

A) True 
 B)False

Question 2

A home equity loan is based only on the amount you still owe on your mortgage.

Accepted Answer

A) True 
 B)False

Question 3

What percentage of consumers are rated high risk based on the VantageScore?

Accepted Answer

A) 16% 
B) 20% 
C) 25% 
D) 9% 
E) 19%

Question 4

A FICO score of 700 would be considered

Accepted Answer

A) poor 
B) very poor 
C) a risk to default 
D) very good 
E) fair

Question 5

There are _________ main credit bureaus in Canada

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 5 
E) 8

Question 6

The best way to maintain your credit rating is to

Accepted Answer

A) use credit sparingly. 
B) pay cash for your purchases. 
C) repay your debts on time. 
D) declare a Chapter 7 bankruptcy. 
E) use as many credit cards as you can.

Question 7

Collateral refers to the borrower's assets or net worth.

Accepted Answer

A) True 
 B)False

Question 8

What would your credit rating be if you have merchandise repossessed?

Accepted Answer

A) R5 
B) R8 
C) R6 
D) R7 
E) R9

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Kathy purchased a $2,000 digital TV from Young's Appliances.She will make 12 equal payments over the next year to pay for it.She is using:

Accepted Answer

A) an installment loan 
B) open-end credit 
C) revolving check credit 
D) a line of credit 
E) none of the above

Question 11

If your put a trip on your credit card that charges you an APR of 19.99% and make the minimum monthly payment of $45 how long will it take to pay off the credit card debt (in months)?

Accepted Answer

A) 24 
B) 36 
C) 49 
D) 60 
E) 96

Question 12

What percentage of credit card users generally pay off their balance in full every month?

Accepted Answer

A) 20% 
B) 30% 
C) 50% 
D) 70% 
E) more than 80%

Question 13

Using a credit card, such as Visa or MasterCard is an example of closed-end credit.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

What is the maximum home equity line of credit that can be obtained (as a percentage)?

Accepted Answer

A) 45% 
B) 50% 
C) 65% 
D) 75% 
E) 25%

Question 16

What percentage of consumers are rated super prime based on the VantageScore?

Accepted Answer

A) 16% 
B) 20% 
C) 25% 
D) 9% 
E) 19%

Question 17

The credit cardholders who pay off their balances in full each month are known as convenience users.

Accepted Answer

A) True 
 B)False

Question 18

The debt-to-equity ratio is calculated by dividing your total liabilities by your net worth.

Accepted Answer

A) True 
 B)False

Question 19

What would your credit rating be if you are declare bankruptcy?

Accepted Answer

A) R5 
B) R2 
C) R6 
D) R7 
E) R9

Question 20

The larger the debt-to-equity ratio, the riskier the situation is for lenders and borrowers.

Accepted Answer

A) True 
 B)False

Exam 5: Introduction to Consumer Credit

Perhaps the greatest disadvantage of using credit is the temptation to overspend.

A home equity loan is based only on the amount you still owe on your mortgage.

What percentage of consumers are rated high risk based on the VantageScore?

A FICO score of 700 would be considered

There are _________ main credit bureaus in Canada

The best way to maintain your credit rating is to

Collateral refers to the borrower's assets or net worth.

What would your credit rating be if you have merchandise repossessed?

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

Kathy purchased a $2,000 digital TV from Young's Appliances.She will make 12 equal payments over the next year to pay for it.She is using:

If your put a trip on your credit card that charges you an APR of 19.99% and make the minimum monthly payment of $45 how long will it take to pay off the credit card debt (in months) ?

What percentage of credit card users generally pay off their balance in full every month?

Using a credit card, such as Visa or MasterCard is an example of closed-end credit.

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

What is the maximum home equity line of credit that can be obtained (as a percentage) ?

What percentage of consumers are rated super prime based on the VantageScore?

The credit cardholders who pay off their balances in full each month are known as convenience users.

The debt-to-equity ratio is calculated by dividing your total liabilities by your net worth.

What would your credit rating be if you are declare bankruptcy?

The larger the debt-to-equity ratio, the riskier the situation is for lenders and borrowers.