Question 1

A lien is a legal right to seize and dispose of (usually sell) property for payment of a claim.

Accepted Answer

A) True 
 B)False

Question 2

If you cut up your credit card,the account is effectively closed.

Accepted Answer

A) True 
 B)False

Question 3

Companies that issue credit cards must disclose the APR but not the periodic rate on the monthly billing statement.

Accepted Answer

A) True 
 B)False

Question 4

Perry had four credit cards in his billfold when his wallet was stolen.He reported the cards missing four days after he discovered the loss,but the following charges were incurred before he reported the stolen cards:
 
How much is Perry's maximum legal liability for the fraudulent charges on these cards?

Accepted Answer

A) $480 
B) $400 
C) $200 
D) $185 
A) $480 
B) $400 
C) $200 
D) $185

Question 5

Default is the failure of a borrower to make a scheduled interest payment.

Accepted Answer

A) True 
 B)False

Question 6

Credit cards with a grace period allow the credit cardholder to pay no finance charges if they pay the balance in full every month.

Accepted Answer

A) True 
 B)False

Question 7

The only way to obtain a secured loan is to put up collateral.

Accepted Answer

A) True 
 B)False

Question 8

The interest rate on variable-rate credit cards is usually tied to some form of prime interest rate.

Accepted Answer

A) True 
 B)False

Question 9

You must make a billing error complaint within 60 days after the transaction has posted.

Accepted Answer

A) True 
 B)False

Question 10

Repossession of property is much easier for the lender with a conditional sales contract than with an installment purchase agreement.

Accepted Answer

A) True 
 B)False

Question 11

Whenever you make more than the minimum payment on your credit card account,the lender must apply any excess above the minimum payment to the portion of the card debt that carries the highest APR.

Accepted Answer

A) True 
 B)False

Question 12

If you notify the card issuer within two days of a loss or theft,you are not legally responsible for any fraudulent usage of the card.

Accepted Answer

A) True 
 B)False

Question 13

A conditional sales contract is also known as a financing lease.

Accepted Answer

A) True 
 B)False

Question 14

The interest rates on cash advances using a credit card are usually higher than the rates for purchases.

Accepted Answer

A) True 
 B)False

Question 15

The penalty APR is a measure of the number of credit card users that pay only the minimum each month.

Accepted Answer

A) True 
 B)False

Question 16

Virginia has just been quoted what appears to be a very competitive loan for $2,000 to be paid back in 24 monthly payments of $96.66 with a finance charge of $240.Using the n-ratio method of estimating the APR,what is the APR on this loan?
$ \mathrm{APR}=\frac{\mathrm{Y}(95 \mathrm{P}+9) \mathrm{F}}{12 \mathrm{P}(\mathrm{P}+1)(4 \mathrm{D}+\mathrm{F})} $

Accepted Answer

A) 8.0 percent 
B) 11.1 percent 
C) 19.2 percent 
D) 24.0 percent 
A) 8.0 percent 
B) 11.1 percent 
C) 19.2 percent 
D) 24.0 percent

Question 17

Travis obtained a $1,000 loan to be paid back at the end of one year.The lender quoted him an 11 percent rate of interest and said the finance charges would be figured according to the discount method.Which of the following statements is correct regarding this loan?

Accepted Answer

A) The APR is higher than 11 percent. 
B) Travis will receive $1,000. 
C) The $1,000 plus finance charges will be paid at the end of one year. 
D) All of these. 
A) The APR is higher than 11 percent. 
B) Travis will receive $1,000. 
C) The $1,000 plus finance charges will be paid at the end of one year. 
D) All of these.

Question 18

What is the monthly payment for a $24,000,four-year,12 percent loan with the interest calculated using the add-on method?

Accepted Answer

A) $500 
B) $560 
C) $740 
D) $1,040 
A) $500 
B) $560 
C) $740 
D) $1,040

Question 19

Repossession clauses protect the borrower's interest.

Accepted Answer

A) True 
 B)False

Question 20

Which type of credit card is issued through commercial banks and other financial institutions?

Accepted Answer

A) Travel and entertainment accounts 
B) Bank credit card accounts 
C) Retail accounts 
D) Thirty-day charge accounts 
A) Travel and entertainment accounts 
B) Bank credit card accounts 
C) Retail accounts 
D) Thirty-day charge accounts

A lien is a legal right to seize and dispose of (usually sell) property for payment of a claim.

If you cut up your credit card,the account is effectively closed.

Companies that issue credit cards must disclose the APR but not the periodic rate on the monthly billing statement.

Default is the failure of a borrower to make a scheduled interest payment.

Credit cards with a grace period allow the credit cardholder to pay no finance charges if they pay the balance in full every month.

The only way to obtain a secured loan is to put up collateral.

The interest rate on variable-rate credit cards is usually tied to some form of prime interest rate.

You must make a billing error complaint within 60 days after the transaction has posted.

Repossession of property is much easier for the lender with a conditional sales contract than with an installment purchase agreement.

Whenever you make more than the minimum payment on your credit card account,the lender must apply any excess above the minimum payment to the portion of the card debt that carries the highest APR.

If you notify the card issuer within two days of a loss or theft,you are not legally responsible for any fraudulent usage of the card.

A conditional sales contract is also known as a financing lease.

The interest rates on cash advances using a credit card are usually higher than the rates for purchases.

The penalty APR is a measure of the number of credit card users that pay only the minimum each month.

Travis obtained a $1,000 loan to be paid back at the end of one year.The lender quoted him an 11 percent rate of interest and said the finance charges would be figured according to the discount method.Which of the following statements is correct regarding this loan?

What is the monthly payment for a $24,000,four-year,12 percent loan with the interest calculated using the add-on method?

Repossession clauses protect the borrower's interest.

Which type of credit card is issued through commercial banks and other financial institutions?

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters

Exam 7: Credit Cards and Consumer Loans

A lien is a legal right to seize and dispose of (usually sell) property for payment of a claim.

If you cut up your credit card,the account is effectively closed.

Companies that issue credit cards must disclose the APR but not the periodic rate on the monthly billing statement.

Default is the failure of a borrower to make a scheduled interest payment.

Credit cards with a grace period allow the credit cardholder to pay no finance charges if they pay the balance in full every month.

The only way to obtain a secured loan is to put up collateral.

The interest rate on variable-rate credit cards is usually tied to some form of prime interest rate.

You must make a billing error complaint within 60 days after the transaction has posted.

Repossession of property is much easier for the lender with a conditional sales contract than with an installment purchase agreement.

Whenever you make more than the minimum payment on your credit card account,the lender must apply any excess above the minimum payment to the portion of the card debt that carries the highest APR.

If you notify the card issuer within two days of a loss or theft,you are not legally responsible for any fraudulent usage of the card.

A conditional sales contract is also known as a financing lease.

The interest rates on cash advances using a credit card are usually higher than the rates for purchases.

The penalty APR is a measure of the number of credit card users that pay only the minimum each month.

Travis obtained a $1,000 loan to be paid back at the end of one year.The lender quoted him an 11 percent rate of interest and said the finance charges would be figured according to the discount method.Which of the following statements is correct regarding this loan?

What is the monthly payment for a $24,000,four-year,12 percent loan with the interest calculated using the add-on method?

Repossession clauses protect the borrower's interest.

Which type of credit card is issued through commercial banks and other financial institutions?

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters