Question 1

If your monthly net (after-tax) income is $1,500, what should be your maximum amount spent on credit payments?

Accepted Answer

A)  $200 
B)  $300 
C)  $400 
D)  $500 
E)  $600 
A)  $200 
B)  $300 
C)  $400 
D)  $500 
E)  $600

Question 2

The maximum amount of credit you are allowed by a creditor is called a(n)

Accepted Answer

A)  revolving credit. 
B)  installment cash credit. 
C)  convenience credit. 
D)  line of credit. 
E)  single lump-sum credit. 
A)  revolving credit. 
B)  installment cash credit. 
C)  convenience credit. 
D)  line of credit. 
E)  single lump-sum credit.

Question 3

There is always a transaction fee attached to make a cash advance.

Accepted Answer

A) True 
 B)False

Question 4

Consumer credit refers to the use of credit for personal needs (except a home mortgage) by individuals.

Accepted Answer

A) True 
 B)False

Question 5

Debt payments-to-income ratio is

Accepted Answer

A)  calculated by dividing total liabilities by net worth. 
B)  calculated by dividing monthly debt payments (not including house payments) by net monthly income. 
C)  determined by dividing your assets into liabilities. 
D)  a useless ratio for determining your credit capacity. 
E)  rarely used by creditors in determining credit worthiness. 
A)  calculated by dividing total liabilities by net worth. 
B)  calculated by dividing monthly debt payments (not including house payments) by net monthly income. 
C)  determined by dividing your assets into liabilities. 
D)  a useless ratio for determining your credit capacity. 
E)  rarely used by creditors in determining credit worthiness.

Question 6

Experts suggest that you spend no more than ____________ percent of your net income on credit purchases.

Accepted Answer

A)  10 
B)  20 
C)  30 
D)  40 
E)  50 
A)  10 
B)  20 
C)  30 
D)  40 
E)  50

Question 7

In evaluating your credit application, a lender may

Accepted Answer

A)  ask your age. 
B)  want to know if you are on public assistance. 
C)  require your marriage certificate. 
D)  ask if you are married or divorced. 
E)  ask your race and nationality. 
A)  ask your age. 
B)  want to know if you are on public assistance. 
C)  require your marriage certificate. 
D)  ask if you are married or divorced. 
E)  ask your race and nationality.

Question 8

If you are a woman, a creditor must

Accepted Answer

A)  require a spouse to cosign a loan. 
B)  ask about your birth control practices or family plans. 
C)  consider whether you have a telephone listing in your own home. 
D)  refuse individual credit in your own name. 
E)  consider income from your part-time employment. 
A)  require a spouse to cosign a loan. 
B)  ask about your birth control practices or family plans. 
C)  consider whether you have a telephone listing in your own home. 
D)  refuse individual credit in your own name. 
E)  consider income from your part-time employment.

Question 9

If there is incorrect information in your credit file,

Accepted Answer

A)  you should sue the credit bureau. 
B)  you must sue the merchant who denied the credit. 
C)  the credit bureau must reinvestigate and modify or remove inaccurate data. 
D)  pray that the credit bureau goes bankrupt. 
E)  you cannot dispute the derogatory information. 
A)  you should sue the credit bureau. 
B)  you must sue the merchant who denied the credit. 
C)  the credit bureau must reinvestigate and modify or remove inaccurate data. 
D)  pray that the credit bureau goes bankrupt. 
E)  you cannot dispute the derogatory information.

Question 10

Credit is an arrangement to receive cash, goods, or services now and pay for them in the future.

Accepted Answer

A) True 
 B)False

Question 11

In the near future, smart cards will provide a crucial link between the World Wide Web and the physical world.

Accepted Answer

A) True 
 B)False

Question 12

It is legal for creditors to ask or assume anything about a woman's childbearing plans.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

FICO scores range between

Accepted Answer

A)  1-10 
B)  1-100 
C)  1-1,000 
D)  300-900 
E)  100-500 
A)  1-10 
B)  1-100 
C)  1-1,000 
D)  300-900 
E)  100-500

Question 16

Financing from car dealers in affiliation with financial institutions is called factory financing.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

An installment loan is a

Accepted Answer

A)  direct loan of money for personal purposes. 
B)  direct loan of money for home improvement. 
C)  loan that allows you to receive merchandise such as a refrigerator or furniture. 
D)  direct loan for vacation purposes. 
E)  synonym for a single lump-sum credit. 
A)  direct loan of money for personal purposes. 
B)  direct loan of money for home improvement. 
C)  loan that allows you to receive merchandise such as a refrigerator or furniture. 
D)  direct loan for vacation purposes. 
E)  synonym for a single lump-sum credit.

Question 19

A car loan is an example of a consumer loan.

Accepted Answer

A) True 
 B)False

Question 20

If you have incorrect information in your credit file,

Accepted Answer

A)  you can't really do much about it. 
B)  you have no legal remedies. 
C)  credit bureaus are not required to change it. 
D)  there are legal remedies available to you. 
E)  don't worry much because you will still get the credit. 
A)  you can't really do much about it. 
B)  you have no legal remedies. 
C)  credit bureaus are not required to change it. 
D)  there are legal remedies available to you. 
E)  don't worry much because you will still get the credit.

If your monthly net (after-tax) income is $1,500, what should be your maximum amount spent on credit payments?

The maximum amount of credit you are allowed by a creditor is called a(n)

There is always a transaction fee attached to make a cash advance.

Consumer credit refers to the use of credit for personal needs (except a home mortgage) by individuals.

Debt payments-to-income ratio is

Experts suggest that you spend no more than ____________ percent of your net income on credit purchases.

In evaluating your credit application, a lender may

If you are a woman, a creditor must

If there is incorrect information in your credit file,

Credit is an arrangement to receive cash, goods, or services now and pay for them in the future.

In the near future, smart cards will provide a crucial link between the World Wide Web and the physical world.

It is legal for creditors to ask or assume anything about a woman's childbearing plans.

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

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

FICO scores range between

Financing from car dealers in affiliation with financial institutions is called factory financing.

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

An installment loan is a

A car loan is an example of a consumer loan.

If you have incorrect information in your credit file,

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Choosing a Source Credit: the Costs of Credit Alternatives

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

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Exam 5: Introduction to Consumer Credit

If your monthly net (after-tax) income is $1,500, what should be your maximum amount spent on credit payments?

The maximum amount of credit you are allowed by a creditor is called a(n)

There is always a transaction fee attached to make a cash advance.

Consumer credit refers to the use of credit for personal needs (except a home mortgage) by individuals.

Debt payments-to-income ratio is

Experts suggest that you spend no more than ____________ percent of your net income on credit purchases.

In evaluating your credit application, a lender may

If you are a woman, a creditor must

If there is incorrect information in your credit file,

Credit is an arrangement to receive cash, goods, or services now and pay for them in the future.

In the near future, smart cards will provide a crucial link between the World Wide Web and the physical world.

It is legal for creditors to ask or assume anything about a woman's childbearing plans.

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

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

FICO scores range between

Financing from car dealers in affiliation with financial institutions is called factory financing.

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

An installment loan is a

A car loan is an example of a consumer loan.

If you have incorrect information in your credit file,

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Choosing a Source Credit: the Costs of Credit Alternatives

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