Question 1

If you are denied credit,you can contact the credit bureau and ask for a copy of your credit report.The bureau cannot charge a fee for this service as long as you ask to see your files within

Accepted Answer

A)   10 days.
B)   20 days.
C)   30 days.
D)   60 days.
E)   90 days. D

Question 2

Sam is comparing the costs of two loans.One is due in one year and the other is due in four years.Both have the same stated rate of interest.Which of the following is true?

Accepted Answer

A)   The principal paid for the one-year loan will be lower than the principal paid for the four-year loan.
B)   The principal paid for the one-year loan will be higher than the principal paid for the four-year loan.
C)   The interest paid for the one-year loan will be lower than the interest paid for the four-year loan.
D)   The interest paid for the one-year loan will be higher than the interest paid for the four-year loan.
E)   The interest and principal payments cannot be compared for the two loans. C

Question 3

When calculating the debt-to-equity ratio,the following is NOT included:

Accepted Answer

A)   Credit card balances.
B)   Open-end credit.
C)   Auto loan balances.
D)   Mortgage balance.
E)   All of these are included in the calculation. D

Question 4

The longer it takes for you to pay off a bill,the less interest you pay.

Accepted Answer

A) True 
 B)False

Question 5

If you have reached the upper limit of debt obligations,your debt-to-equity ratio is about

Accepted Answer

A)   0.
B)   0.2.
C)   0.25.
D)   0.5.
E)   1.

Question 6

Timothy Carter has net monthly income of $3,800.He has a monthly auto loan payment of $350,a student loan payment of $145,a mortgage payment of $1,200,and a credit card minimum payment of $45.What is his debt-payments-to-income ratio?

Accepted Answer

The answer of Timothy Carter has net monthly income of...

Question 7

A disadvantage of using credit is its use when making a hotel reservation.

Accepted Answer

A) True 
 B)False

Question 8

Credit bureaus get their information from all of the following except

Accepted Answer

A)   Banks.
B)   Credit card companies.
C)   Finance companies.
D)   References.
E)   Stores.

Question 9

Before buying goods and services on credit,a consumer should consider all of the following except

Accepted Answer

A)   Whether the good or service will have lasting value.
B)   Whether the good or service will increase personal satisfaction during present income periods.
C)   Whether the good or service will increase personal satisfaction during future income periods.
D)   Whether current income will continue or increase.
E)   Whether the good or service will be worth more because it was purchased with credit instead of cash.

Question 10

Peter borrowed $225.He paid $20 interest and a service charge of $3.00.What is his finance charge?

Accepted Answer

A)   $3.00
B)   $20.00
C)   $23.00
D)   $225.00
E)   $248.00

Question 11

According to the Fair Credit Billing Act of 1975,a consumer may tell a credit card company to stop payment for a defective good if the consumer has made a sincere attempt to resolve the problem with the store.

Accepted Answer

A) True 
 B)False

Question 12

Hannah has liabilities totaling $30,000 (excluding her mortgage of $100,000).Her net worth is $45,000.What is her debt-to-equity ratio?

Accepted Answer

A)   .45
B)   .67
C)   .75
D)   1.00
E)   1.30

Question 13

Which of the following acts sets procedures for promptly correcting billing mistakes,refusing to make credit card or revolving credit payments on defective goods,and promptly crediting your payments?

Accepted Answer

A)   Experian Act of 1982
B)   Fair Credit Reporting Act of 1971
C)   Bills and Disputes Act of 1963
D)   Equifax Act of 1979
E)   Fair Credit Billing Act of 1975

Question 14

The least expensive loans are often provided by parents or other family members.

Accepted Answer

A) True 
 B)False

Question 15

Identify three steps you can take to recognize,avoid,and report fraud or deception on the Internet.

Accepted Answer

The answer of Identify three steps you can take to...

Question 16

A loan officer is examining whether or not to will offer you a loan today.Specifically,she is examining your income and debts.Which of the five Cs is the loan officer reviewing?

Accepted Answer

A)   Character
B)   Capacity
C)   Capital
D)   Collateral
E)   Conditions

Question 17

Juan purchased some new appliances and took out a $1,600 loan from the bank.The bank is using the simple interest formula for this two-year,9% loan.What is the total amount he will pay when the loan is due?

Accepted Answer

The answer of Juan purchased some new appliances and took...

Question 18

Closed-end credit consists of loans made on a continuous basis with periodic bills for at least partial payment.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a valid reason for borrowing?

Accepted Answer

A)   Purchasing a car so a homemaker can return to work
B)   Borrowing for a college education
C)   Purchasing a home
D)   Paying for a medical emergency
E)   All of these are valid reasons for borrowing

Question 20

Following the signing of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,debtors seeking to erase all debts will have to wait ___ year(s)from their last bankruptcy before they can file again.

Accepted Answer

A)   one
B)   three
C)   seven
D)   eight
E)   ten

Exam 5: Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

If you are denied credit,you can contact the credit bureau and ask for a copy of your credit report.The bureau cannot charge a fee for this service as long as you ask to see your files within

Sam is comparing the costs of two loans.One is due in one year and the other is due in four years.Both have the same stated rate of interest.Which of the following is true?

When calculating the debt-to-equity ratio,the following is NOT included:

The longer it takes for you to pay off a bill,the less interest you pay.

If you have reached the upper limit of debt obligations,your debt-to-equity ratio is about

Timothy Carter has net monthly income of $3,800.He has a monthly auto loan payment of $350,a student loan payment of $145,a mortgage payment of $1,200,and a credit card minimum payment of $45.What is his debt-payments-to-income ratio?

A disadvantage of using credit is its use when making a hotel reservation.

Credit bureaus get their information from all of the following except

Before buying goods and services on credit,a consumer should consider all of the following except

Peter borrowed $225.He paid $20 interest and a service charge of $3.00.What is his finance charge?

According to the Fair Credit Billing Act of 1975,a consumer may tell a credit card company to stop payment for a defective good if the consumer has made a sincere attempt to resolve the problem with the store.

Hannah has liabilities totaling $30,000 (excluding her mortgage of $100,000) .Her net worth is $45,000.What is her debt-to-equity ratio?

Which of the following acts sets procedures for promptly correcting billing mistakes,refusing to make credit card or revolving credit payments on defective goods,and promptly crediting your payments?

The least expensive loans are often provided by parents or other family members.

Identify three steps you can take to recognize,avoid,and report fraud or deception on the Internet.

A loan officer is examining whether or not to will offer you a loan today.Specifically,she is examining your income and debts.Which of the five Cs is the loan officer reviewing?

Juan purchased some new appliances and took out a $1,600 loan from the bank.The bank is using the simple interest formula for this two-year,9% loan.What is the total amount he will pay when the loan is due?

Closed-end credit consists of loans made on a continuous basis with periodic bills for at least partial payment.

Which of the following is a valid reason for borrowing?

Following the signing of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,debtors seeking to erase all debts will have to wait ___ year(s) from their last bankruptcy before they can file again.