Question 1

____ loans do not have to be repaid until after you graduate from college.

Accepted Answer

A) Stafford and Perkins 
B) Stafford and PLUS 
C) Perkins and PLUS 
D) Only Stafford 
E) Only Perkins 
A) Stafford and Perkins 
B) Stafford and PLUS 
C) Perkins and PLUS 
D) Only Stafford 
E) Only Perkins

Question 2

Installment loans are typically repaid in one payment.

Accepted Answer

A) True 
 B)False

Question 3

Loans against a life insurance policy do not have to be paid back.

Accepted Answer

A) True 
 B)False

Question 4

The most popular use of consumer loans is to

Accepted Answer

A) purchase a car. 
B) finance a college education. 
C) finance a vacation. 
D) buy a house. 
E) buy furniture. 
A) purchase a car. 
B) finance a college education. 
C) finance a vacation. 
D) buy a house. 
E) buy furniture.

Question 5

Sometimes it may be better to use savings rather than credit to make a purchase.This would be recommended when

Accepted Answer

A) the borrower has adequate savings. 
B) interest rates are rising. 
C) interest rates are falling. 
D) the cost of borrowing is greater than the interest earned on the savings. 
E) interest earned on savings is greater than the interest paid on the loan. 
A) the borrower has adequate savings. 
B) interest rates are rising. 
C) interest rates are falling. 
D) the cost of borrowing is greater than the interest earned on the savings. 
E) interest earned on savings is greater than the interest paid on the loan.

Question 6

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-[Consumer finance companies | Credit unions] obtain funds from their stockholders and through open market borrowing.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 7

Generally speaking,variable-rate loans are desirable to the consumer if interest rates are expected to increase over the course of the loan.

Accepted Answer

A) True 
 B)False

Question 8

When the market interest rate goes up,the rate on variable-rate loans goes up.

Accepted Answer

A) True 
 B)False

Question 9

Cash value loans are available from all types of life insurance policies.

Accepted Answer

A) True 
 B)False

Question 10

A ____ is often a source of low-rate automobile financing on specific models of vehicles.

Accepted Answer

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

Question 11

The repayment period on most installment loans is six to twelve months.

Accepted Answer

A) True 
 B)False

Question 12

Most loans made by consumer finance companies are for larger amounts and are made to low-risk borrowers.

Accepted Answer

A) True 
 B)False

Question 13

Sales finance companies commonly purchase the retail installment contracts of businesses that sell big-ticket items such as automobiles,furniture,and appliances.

Accepted Answer

A) True 
 B)False

Question 14

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-The majority of consumer loans are made with [fixed | variable] interest rates.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 15

Credit unions dominate the consumer loan market.

Accepted Answer

A) True 
 B)False

Question 16

Given the choice,it is almost always better to accept a rebate rather than 0 percent APR on an auto loan.

Accepted Answer

A) True 
 B)False

Question 17

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

Accepted Answer

A) True 
 B)False

Question 18

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-The majority of single-payment loans [are | are not] secured by collateral.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 19

The annual percentage rate (APR)on a single-payment loan for $1,000 at a simple interest rate of 12% is

Accepted Answer

A) 10%. 
B) 12%. 
C) 15%. 
D) 18%. 
E) 24%. 
A) 10%. 
B) 12%. 
C) 15%. 
D) 18%. 
E) 24%.

Question 20

The average graduating college senior leaves school with about _______ in debt.

Accepted Answer

A) $12,800 
B) $18,400 
C) $26,300 
D) $30,000 
E) $50,000 
A) $12,800 
B) $18,400 
C) $26,300 
D) $30,000 
E) $50,000

____ loans do not have to be repaid until after you graduate from college.

Installment loans are typically repaid in one payment.

Loans against a life insurance policy do not have to be paid back.

The most popular use of consumer loans is to

Sometimes it may be better to use savings rather than credit to make a purchase.This would be recommended when

Generally speaking,variable-rate loans are desirable to the consumer if interest rates are expected to increase over the course of the loan.

When the market interest rate goes up,the rate on variable-rate loans goes up.

Cash value loans are available from all types of life insurance policies.

A ____ is often a source of low-rate automobile financing on specific models of vehicles.

The repayment period on most installment loans is six to twelve months.

Most loans made by consumer finance companies are for larger amounts and are made to low-risk borrowers.

Sales finance companies commonly purchase the retail installment contracts of businesses that sell big-ticket items such as automobiles,furniture,and appliances.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The majority of consumer loans are made with [fixed | variable] interest rates.

Credit unions dominate the consumer loan market.

Given the choice,it is almost always better to accept a rebate rather than 0 percent APR on an auto loan.

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The majority of single-payment loans [are | are not] secured by collateral.

The annual percentage rate (APR)on a single-payment loan for $1,000 at a simple interest rate of 12% is

The average graduating college senior leaves school with about _______ in debt.

Understanding the Financial Planning 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

Planning for Retirement

Preserving Your Estate

Filters

Exam 7: Using Consumer Loans

____ loans do not have to be repaid until after you graduate from college.

Installment loans are typically repaid in one payment.

Loans against a life insurance policy do not have to be paid back.

The most popular use of consumer loans is to

Sometimes it may be better to use savings rather than credit to make a purchase.This would be recommended when

Generally speaking,variable-rate loans are desirable to the consumer if interest rates are expected to increase over the course of the loan.

When the market interest rate goes up,the rate on variable-rate loans goes up.

Cash value loans are available from all types of life insurance policies.

A ____ is often a source of low-rate automobile financing on specific models of vehicles.

The repayment period on most installment loans is six to twelve months.

Most loans made by consumer finance companies are for larger amounts and are made to low-risk borrowers.

Sales finance companies commonly purchase the retail installment contracts of businesses that sell big-ticket items such as automobiles,furniture,and appliances.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The majority of consumer loans are made with [fixed | variable] interest rates.

Credit unions dominate the consumer loan market.

Given the choice,it is almost always better to accept a rebate rather than 0 percent APR on an auto loan.

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The majority of single-payment loans [are | are not] secured by collateral.

The annual percentage rate (APR)on a single-payment loan for $1,000 at a simple interest rate of 12% is

The average graduating college senior leaves school with about _______ in debt.

Understanding the Financial Planning 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

Planning for Retirement

Preserving Your Estate

Filters