Question 1

The least expensive loans are available from car dealers, appliance stores, department stores.

Accepted Answer

A) True 
 B)False  False

Question 2

Two key concepts that you should keep in mind when borrowing are the finance charge and the annual percentage rate.

Accepted Answer

A) True 
 B)False  True

Question 3

If you borrow $200 at 8 percent annual interest and repay it in one lump sum at the end of one year, you will have to pay

Accepted Answer

A)  $16. 
B)  $200. 
C)  $216. 
D)  $208 
E)  $8. 
A)  $16. 
B)  $200. 
C)  $216. 
D)  $208 
E)  $8. C

Question 4

It takes considerably longer to repay an interest only line of credit than it takes to repay a traditional consumer installment loan.

Accepted Answer

A) True 
 B)False

Question 5

What is monthly payment for a $25,000 amortized loan to purchase a car payable over 5 years at an annual interest rate of 12%?

Accepted Answer

A)  $200 
B)  $333 
C)  $445 
D)  $556 
E)  $565 
A)  $200 
B)  $333 
C)  $445 
D)  $556 
E)  $565

Question 6

There is never a charge for any service provided by a credit counsellor.

Accepted Answer

A) True 
 B)False

Question 7

You can often obtain medium-priced loans from banks, trust companies, and credit unions.

Accepted Answer

A) True 
 B)False

Question 8

What is monthly payment for a $25,000 amortized loan to purchase a car payable over 5 years at an annual interest rate of 6%?

Accepted Answer

A)  $416 
B)  $432 
C)  $483 
D)  $556 
E)  $565 
A)  $416 
B)  $432 
C)  $483 
D)  $556 
E)  $565

Question 9

Banks often encourage you to make the maximum payment.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following are signs of debt problems?

Accepted Answer

A)  you continually go over your spending limit 
B)  use credit cards as a necessity rather than as a convenience 
C)  always borrowing money to make it from one payday to the next 
D)  A and B are correct. 
E)  A, B and C are correct. 
A)  you continually go over your spending limit 
B)  use credit cards as a necessity rather than as a convenience 
C)  always borrowing money to make it from one payday to the next 
D)  A and B are correct. 
E)  A, B and C are correct.

Question 11

Which type of credit insurance repays your debt in the event of a loss of income due to illness or injury?

Accepted Answer

A)  credit life insurance 
B)  credit accident and health insurance 
C)  credit property insurance 
D)  credit casualty insurance 
E)  credit debit insurance 
A)  credit life insurance 
B)  credit accident and health insurance 
C)  credit property insurance 
D)  credit casualty insurance 
E)  credit debit insurance

Question 12

Both consumer proposals and declarations of insolvency through an assignment in bankruptcy are considered an easy way out of debt.

Accepted Answer

A) True 
 B)False

Question 13

Compounding the annual percentage rate (APR) four times a year is equivalent to:

Accepted Answer

A)  the annual percentage rate (APR) quoted by a financial institution. 
B)  the annual percentage rate (APR) compounded semi-annually. 
C)  the effective annual rate (EAR) annually. 
D)  the effective annual rate (EAR) semi-annually 
E)  the effective annual rate (EAR) quarterly. 
A)  the annual percentage rate (APR) quoted by a financial institution. 
B)  the annual percentage rate (APR) compounded semi-annually. 
C)  the effective annual rate (EAR) annually. 
D)  the effective annual rate (EAR) semi-annually 
E)  the effective annual rate (EAR) quarterly.

Question 14

With a larger down payment, you'll probably pay a higher interest rate on your loan.

Accepted Answer

A) True 
 B)False

Question 15

In a straight bankruptcy many, but not all, debts are forgiven.

Accepted Answer

A) True 
 B)False

Question 16

A maximum 5-year plan for paying creditors all or a portion of outstanding debt is referred to as a consumer ________________________.

Accepted Answer

A)  bankruptcy 
B)  proposal 
C)  consolidation 
D)  counseling 
E)  Assurance 
A)  bankruptcy 
B)  proposal 
C)  consolidation 
D)  counseling 
E)  Assurance

Question 17

What effective rate of interest is being charged when the quoted APR is 6%, compounded semi-annually?

Accepted Answer

A)  6.00% 
B)  6.09% 
C)  6.17% 
D)  6.18% 
E)  6.50% 
A)  6.00% 
B)  6.09% 
C)  6.17% 
D)  6.18% 
E)  6.50%

Question 18

If you are having trouble paying your bills, turn to a company that claims to offer assistance in solving debt problems.

Accepted Answer

A) True 
 B)False

Question 19

If a bank charges you interest up front then this loan is called a _________ loan

Accepted Answer

A)  compounded. 
B)  simple interest. 
C)  discount. 
D)  add-on. 
E)  installment. 
A)  compounded. 
B)  simple interest. 
C)  discount. 
D)  add-on. 
E)  installment.

Question 20

During the last decade, the personal bankruptcy rate has increased almost 8 percent annually.

Accepted Answer

A) True 
 B)False

The least expensive loans are available from car dealers, appliance stores, department stores.

Two key concepts that you should keep in mind when borrowing are the finance charge and the annual percentage rate.

If you borrow $200 at 8 percent annual interest and repay it in one lump sum at the end of one year, you will have to pay

It takes considerably longer to repay an interest only line of credit than it takes to repay a traditional consumer installment loan.

What is monthly payment for a $25,000 amortized loan to purchase a car payable over 5 years at an annual interest rate of 12%?

There is never a charge for any service provided by a credit counsellor.

You can often obtain medium-priced loans from banks, trust companies, and credit unions.

What is monthly payment for a $25,000 amortized loan to purchase a car payable over 5 years at an annual interest rate of 6%?

Banks often encourage you to make the maximum payment.

Which of the following are signs of debt problems?

Which type of credit insurance repays your debt in the event of a loss of income due to illness or injury?

Both consumer proposals and declarations of insolvency through an assignment in bankruptcy are considered an easy way out of debt.

Compounding the annual percentage rate (APR) four times a year is equivalent to:

With a larger down payment, you'll probably pay a higher interest rate on your loan.

In a straight bankruptcy many, but not all, debts are forgiven.

A maximum 5-year plan for paying creditors all or a portion of outstanding debt is referred to as a consumer ________________________.

What effective rate of interest is being charged when the quoted APR is 6%, compounded semi-annually?

If you are having trouble paying your bills, turn to a company that claims to offer assistance in solving debt problems.

If a bank charges you interest up front then this loan is called a _________ loan

During the last decade, the personal bankruptcy rate has increased almost 8 percent annually.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Introduction to Consumer Credit

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters

Exam 6: Choosing a Source Credit: the Costs of Credit Alternatives

The least expensive loans are available from car dealers, appliance stores, department stores.

Two key concepts that you should keep in mind when borrowing are the finance charge and the annual percentage rate.

If you borrow $200 at 8 percent annual interest and repay it in one lump sum at the end of one year, you will have to pay

It takes considerably longer to repay an interest only line of credit than it takes to repay a traditional consumer installment loan.

What is monthly payment for a $25,000 amortized loan to purchase a car payable over 5 years at an annual interest rate of 12%?

There is never a charge for any service provided by a credit counsellor.

You can often obtain medium-priced loans from banks, trust companies, and credit unions.

What is monthly payment for a $25,000 amortized loan to purchase a car payable over 5 years at an annual interest rate of 6%?

Banks often encourage you to make the maximum payment.

Which of the following are signs of debt problems?

Which type of credit insurance repays your debt in the event of a loss of income due to illness or injury?

Both consumer proposals and declarations of insolvency through an assignment in bankruptcy are considered an easy way out of debt.

Compounding the annual percentage rate (APR) four times a year is equivalent to:

With a larger down payment, you'll probably pay a higher interest rate on your loan.

In a straight bankruptcy many, but not all, debts are forgiven.

A maximum 5-year plan for paying creditors all or a portion of outstanding debt is referred to as a consumer ________________________.

What effective rate of interest is being charged when the quoted APR is 6%, compounded semi-annually?

If you are having trouble paying your bills, turn to a company that claims to offer assistance in solving debt problems.

If a bank charges you interest up front then this loan is called a _________ loan

During the last decade, the personal bankruptcy rate has increased almost 8 percent annually.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Introduction to Consumer Credit

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters