Question 1

Rebates are always more cost effective than the 0% annual percentage rate (APR)loans offered on automobile loans.

Accepted Answer

A) True 
 B)False

Question 2

Jenny's monthly take-home pay is $5,000, and her total monthly payments are $1,000. Which of the following is Jenny's debt safety ratio?

Accepted Answer

A) 10% 
B) 5% 
C) 20% 
D) 35% 
E) 40% 
A) 10% 
B) 5% 
C) 20% 
D) 35% 
E) 40%

Question 3

A legal claim that allows lenders to liquidate loan collateral, in case the borrower defaults, is called a:

Accepted Answer

A) loan contract. 
B) promissory note. 
C) lien. 
D) security claim. 
E) rollover. 
A) loan contract. 
B) promissory note. 
C) lien. 
D) security claim. 
E) rollover.

Question 4

The cash value of some types of life insurance policies can be used as collateral for loans.

Accepted Answer

A) True 
 B)False

Question 5

_____ obtain funds from their stockholders and through open market borrowing.

Accepted Answer

A) Credit unions 
B) Consumer finance companies 
C) Commercial banks 
D) Life insurance companies 
E) S&Ls 
A) Credit unions 
B) Consumer finance companies 
C) Commercial banks 
D) Life insurance companies 
E) S&Ls

Question 6

Which of the following statements regarding credit unions is true?

Accepted Answer

A) They make secured loans only to non-members. 
B) They are owned and managed by the government. 
C) They provide installment loans to their members. 
D) They charge higher interest rates than other sources of consumer loans. 
E) They are profit-making organizations. 
A) They make secured loans only to non-members. 
B) They are owned and managed by the government. 
C) They provide installment loans to their members. 
D) They charge higher interest rates than other sources of consumer loans. 
E) They are profit-making organizations.

Question 7

Which of the following statements regarding loan collateral is true?

Accepted Answer

A) Loans secured by collateral always have higher finance charges than unsecured loans. 
B) Collateral is an item of value used to secure the principal portion of a loan. 
C) Collateral is always required by banks to lend to customers with good credit ratings. 
D) Collateral is an item of value used to secure the interest portion of a loan. 
E) Loans are secured by collateral that is readily marketable at a price high enough to cover the interest portion of the loan. 
A) Loans secured by collateral always have higher finance charges than unsecured loans. 
B) Collateral is an item of value used to secure the principal portion of a loan. 
C) Collateral is always required by banks to lend to customers with good credit ratings. 
D) Collateral is an item of value used to secure the interest portion of a loan. 
E) Loans are secured by collateral that is readily marketable at a price high enough to cover the interest portion of the loan.

Question 8

The debt safety ratio indicates the total assets owned by an individual.

Accepted Answer

A) True 
 B)False

Question 9

The frequency of longer-term installment loans carrying variable interest rates is increasing.

Accepted Answer

A) True 
 B)False

Question 10

Borrowing from _____ is not advisable.

Accepted Answer

A) relatives 
B) consumer finance companies 
C) asset management companies 
D) credit unions 
E) commercial banks 
A) relatives 
B) consumer finance companies 
C) asset management companies 
D) credit unions 
E) commercial banks

Question 11

If your debt safety ratio works out to 10%, you are relying too heavily on credit.

Accepted Answer

A) True 
 B)False

Question 12

You can borrow, repay, and reborrow from a home equity loan in the same way as you can from a home equity credit line.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a nondepository institution?

Accepted Answer

A) A commercial bank 
B) A credit union 
C) A consumer finance company 
D) A savings and loan association 
E) A savings bank 
A) A commercial bank 
B) A credit union 
C) A consumer finance company 
D) A savings and loan association 
E) A savings bank

Question 14

Loan repayment under the Parent Loans for Undergraduate Students (PLUS)program normally begins within _____ of loan disbursement.

Accepted Answer

A) 30 days 
B) 60 days 
C) 90 days 
D) 120 days 
E) 180 days 
A) 30 days 
B) 60 days 
C) 90 days 
D) 120 days 
E) 180 days

Rebates are always more cost effective than the 0% annual percentage rate (APR)loans offered on automobile loans.

Jenny's monthly take-home pay is $5,000, and her total monthly payments are $1,000. Which of the following is Jenny's debt safety ratio?

A legal claim that allows lenders to liquidate loan collateral, in case the borrower defaults, is called a:

The cash value of some types of life insurance policies can be used as collateral for loans.

_____ obtain funds from their stockholders and through open market borrowing.

Which of the following statements regarding credit unions is true?

Which of the following statements regarding loan collateral is true?

The debt safety ratio indicates the total assets owned by an individual.

The frequency of longer-term installment loans carrying variable interest rates is increasing.

Borrowing from _____ is not advisable.

If your debt safety ratio works out to 10%, you are relying too heavily on credit.

You can borrow, repay, and reborrow from a home equity loan in the same way as you can from a home equity credit line.

Which of the following is a nondepository institution?

Loan repayment under the Parent Loans for Undergraduate Students (PLUS)program normally begins within _____ of loan disbursement.

Understanding the Financial Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 7: Using Consumer Loans

Rebates are always more cost effective than the 0% annual percentage rate (APR)loans offered on automobile loans.

Jenny's monthly take-home pay is $5,000, and her total monthly payments are $1,000. Which of the following is Jenny's debt safety ratio?

A legal claim that allows lenders to liquidate loan collateral, in case the borrower defaults, is called a:

The cash value of some types of life insurance policies can be used as collateral for loans.

_____ obtain funds from their stockholders and through open market borrowing.

Which of the following statements regarding credit unions is true?

Which of the following statements regarding loan collateral is true?

The debt safety ratio indicates the total assets owned by an individual.

The frequency of longer-term installment loans carrying variable interest rates is increasing.

Borrowing from _____ is not advisable.

If your debt safety ratio works out to 10%, you are relying too heavily on credit.

You can borrow, repay, and reborrow from a home equity loan in the same way as you can from a home equity credit line.

Which of the following is a nondepository institution?

Loan repayment under the Parent Loans for Undergraduate Students (PLUS)program normally begins within _____ of loan disbursement.

Understanding the Financial Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Preserving Your Estate

Filters