Question 1

Debt-to-equity ratio is

Accepted Answer

A)  a useless ratio for determining your credit capacity. 
B)  calculated by dividing monthly debt payments by net monthly income. 
C)  determined by dividing your assets by liabilities. 
D)  calculated by dividing total liabilities by net worth. 
E)  rarely used by creditors in determining credit worthiness.

Question 2

What can be included in your credit report?

Accepted Answer

A)  race 
B)  nationality 
C)  sex 
D)  employer 
E)  religion

Question 3

Provincial legislation regarding consumer reporting agencies regulate the type of information that can appear in a credit report and protects the consumer's right not to suffer from false information.

Accepted Answer

A) True 
 B)False

Question 4

If you are an Ontario resident and you have declared personal bankruptcy for the first time,that fact may be reported by credit bureaus for ____________ years.

Accepted Answer

A)  5 
B)  7 
C)  12 
D)  20 
E)  25

Question 5

Financing from car dealers in affiliation with car manufacturers is called a conditional sales contract.

Accepted Answer

A) True 
 B)False

Question 6

Your credit report may be issued only if this occurs with your consent.

Accepted Answer

A) True 
 B)False

Question 7

If your credit application is denied,you

Accepted Answer

A)  can sue the credit rating agency. 
B)  can file a complaint against the merchant. 
C)  don't have any rights provided by law. 
D)  should ask to know specifically why. 
E)  can reapply for credit after 30 days.

Question 8

A good example of an open-end credit is

Accepted Answer

A)  the use of a bank credit card to make a purchase. 
B)  the mortgage loan from a savings and loan institution. 
C)  automobile loan from a credit union. 
D)  installment loan from a furniture store. 
E)  installment loan for purchasing a major appliance.

Question 9

A common example of a consumer loan is:

Accepted Answer

A)  a credit card issued by a department store. 
B)  a credit card issued by VISA or MasterCard. 
C)  using overdraft protection at a bank. 
D)  using a cashier's check to pay for a purchase. 
E)  a mortgage loan.

Question 10

A credit arrangement that has no extra costs and no specific repayment plan is called

Accepted Answer

A)  installment sales credit. 
B)  incidental credit. 
C)  line of credit. 
D)  single lump-sum credit. 
E)  revolving check credit.

Question 11

Which of the following agencies can produce for a subscribing creditor,almost instantaneously,a report about your past and present credit activity?

Accepted Answer

A)  The Bank of Canada 
B)  The Canada Customs and Revenue Agency 
C)  Your financial institution 
D)  A debit bureau 
E)  A credit bureau

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

What can you do if your identity is stolen?

Accepted Answer

The answer of What can you do if your identity...

Question 14

Incidental credit is a credit arrangement that has no extra costs and no specific repayment plan.

Accepted Answer

A) True 
 B)False

Question 15

Credit should not be considered a substitute for cash.

Accepted Answer

A) True 
 B)False

Question 16

Cobranding is the linking of a credit card with a business trade name offering "points" or premiums toward the purchase of a product or service.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not an example of a consumer loan?

Accepted Answer

A)  installment loan 
B)  convenience credit 
C)  revolving credit 
D)  line of credit. 
E)  bank card credit

Question 18

What are the two general rules of measuring credit capacity?

Accepted Answer

The answer of What are the two general rules of...

Question 19

Which of these is not a financing option for the purchase of a car?

Accepted Answer

A)  factory financing 
B)  line of credit 
C)  conditional sales contract 
D)  installment loan 
E)  cash

Question 20

A term that refers to the borrower's assets or net worth is called

Accepted Answer

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

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

Debt-to-equity ratio is

What can be included in your credit report?

Provincial legislation regarding consumer reporting agencies regulate the type of information that can appear in a credit report and protects the consumer's right not to suffer from false information.

If you are an Ontario resident and you have declared personal bankruptcy for the first time,that fact may be reported by credit bureaus for ____________ years.

Financing from car dealers in affiliation with car manufacturers is called a conditional sales contract.

Your credit report may be issued only if this occurs with your consent.

If your credit application is denied,you

A good example of an open-end credit is

A common example of a consumer loan is:

A credit arrangement that has no extra costs and no specific repayment plan is called

Which of the following agencies can produce for a subscribing creditor,almost instantaneously,a report about your past and present credit activity?

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

What can you do if your identity is stolen?

Incidental credit is a credit arrangement that has no extra costs and no specific repayment plan.

Credit should not be considered a substitute for cash.

Cobranding is the linking of a credit card with a business trade name offering "points" or premiums toward the purchase of a product or service.

Which of the following is not an example of a consumer loan?

What are the two general rules of measuring credit capacity?

Which of these is not a financing option for the purchase of a car?

A term that refers to the borrower's assets or net worth is called