Question 1

Paul Carter is applying for a loan from a bank.The bank is concerned because Paul is an airline pilot for United Airlines.The bank thinks that Paul may be laid off in the near future.Which one of the 5 Cs of credit is the bank concerned with?

Accepted Answer

A)  character
B)  capacity
C)  capital
D)  collateral
E)  conditionsF) B) and C)
G) B) and E)

Question 2

The aging of the baby boom generation has added to the growth of consumer credit.

Accepted Answer

A) True 
 B)False

Question 3

What is consumer credit? What are its advantages and disadvantages?

Accepted Answer

The answer of What is consumer credit? What are its...

Question 4

A creditor may ignore your retirement income in rating your application.

Accepted Answer

A) True 
 B)False

Question 5

Cobranded credit cards:

Accepted Answer

A)  are often linked with a certain business trade name offering "points"
B)  help build customer loyalty
C)  allow the cardholder to earn rebates on products and services
D)  have increased in popularity since 1992
E)  all other answers are all correctF) B) and C)
G) A) and E)

Question 6

Installment cash credit is a direct loan of money for personal purposes,home improvements,or vacation expenses.

Accepted Answer

A) True 
 B)False

Question 7

What are a few things to consider before you cosign a loan?

Accepted Answer

The answer of What are a few things to consider...

Question 8

What is revolving check credit?

Accepted Answer

The answer of What is revolving check credit?...

Question 9

Which federal consumer credit law provides specific cost disclosure requirements for the annual percentage rate and the finance charge as a dollar amount?

Accepted Answer

A)  Fair Debt Collection Practice Act
B)  Equal Credit Opportunity Act
C)  Fair Credit Billing Act
D)  Fair Credit Reporting Act
E)  Truth in Lending ActF) C) and E)
G) A) and B)

Question 10

What would be the maximum limit for an individual's debt-to-equity ratio,excluding the home mortgage?

Accepted Answer

A)  0.50
B)  0.33
C)  1.00
D)  2.00
E)  2.25F) B) and E)
G) A) and E)

Question 11

Dave's take-home-pay per month is $2,200.What is the maximum dollar amount of debt payments,excluding a home mortgage,he should have?

Accepted Answer

A)  $880
B)  $440
C)  $330
D)  $220
E)  $0F) B) and E)
G) A) and D)

Question 12

If you cosign a loan:

Accepted Answer

A)  you are only responsible for half of the debt obligation.
B)  you will be asked,but not required,to pay the loan if full if the borrower fails to pay.
C)  you will be required to pay the loan in full if the borrower defaults on the payments.
D)  the creditor must first try to collect from the borrower.
E)  the creditor is prohibited from garnishing your wages if you refuse to pay the loan in full.F) A) and B)
G) B) and C)

Question 13

Which FICO credit score would represent the least risky borrower?

Accepted Answer

A)  415
B)  562
C)  685
D)  702
E)  825F) B) and D)
G) A) and B)

Question 14

A credit arrangement that has no extra costs and no specific repayment plan is called:

Accepted Answer

A)  installment sales credit.
B)  single lump-sum credit.
C)  line of credit.
D)  incidental credit.
E)  revolving check credit.F) A) and E)
G) All of the above

Question 15

Which one of the following is an advantage of using credit?

Accepted Answer

A)  potential bankruptcy
B)  spending beyond your budget
C)  funding an emergency expense
D)  committing future income to pay for current purchases
E)  incurring interest chargesF) B) and D)
G) B) and E)

Question 16

In the 5 Cs of credit,conditions refers to general economic conditions that can affect your ability to repay a loan.

Accepted Answer

A) True 
 B)False

Question 17

With a revolving line of credit,borrowings are permitted up to a specified limit and for a stated period.

Accepted Answer

A) True 
 B)False

Question 18

In the 5 Cs of credit,character refers to the borrower's attitude toward credit obligations.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a credit bureau?

Accepted Answer

A)  Federal Reserve
B)  Federal Trade Commission
C)  Better Business Bureau
D)  Experian
E)  FICOF) A) and E)
G) A) and C)

Question 20

What should you do when you shop on-line using your credit card?

Accepted Answer

A)  delete immediately all records of your transactions
B)  use a secure browser
C)  give out your private information to anyone who requests it on-line
D)  make sure to open and download all files sent you by strangers
E)  give your password to anyone who requests itF) B) and D)
G) A) and C)

Exam 6: Introduction to Consumer Credit

What are a few things to consider before you cosign a loan?

Correct AnswerverifiedShow Answer

Installment cash credit is a direct loan of money for personal purposes,home improvements,or vacation expenses.

Correct AnswerverifiedShow Answer

Cobranded credit cards:

Correct AnswerverifiedShow Answer

Which one of the following is an advantage of using credit?

Correct AnswerverifiedShow Answer

Which federal consumer credit law provides specific cost disclosure requirements for the annual percentage rate and the finance charge as a dollar amount?

Correct AnswerverifiedShow Answer

What would be the maximum limit for an individual's debt-to-equity ratio,excluding the home mortgage?

Correct AnswerverifiedShow Answer

Dave's take-home-pay per month is $2,200.What is the maximum dollar amount of debt payments,excluding a home mortgage,he should have?

Correct AnswerverifiedShow Answer

Paul Carter is applying for a loan from a bank.The bank is concerned because Paul is an airline pilot for United Airlines.The bank thinks that Paul may be laid off in the near future.Which one of the 5 Cs of credit is the bank concerned with?

Correct AnswerverifiedShow Answer

A creditor may ignore your retirement income in rating your application.

Correct AnswerverifiedShow Answer

If you cosign a loan:

Correct AnswerverifiedShow Answer

A credit arrangement that has no extra costs and no specific repayment plan is called:

Correct AnswerverifiedShow Answer

In the 5 Cs of credit,character refers to the borrower's attitude toward credit obligations.

Correct AnswerverifiedShow Answer

What is revolving check credit?

Correct AnswerverifiedShow Answer

Which of the following is a credit bureau?

Correct AnswerverifiedShow Answer

What should you do when you shop on-line using your credit card?

Correct AnswerverifiedShow Answer

With a revolving line of credit,borrowings are permitted up to a specified limit and for a stated period.

Correct AnswerverifiedShow Answer

What is consumer credit? What are its advantages and disadvantages?

Correct AnswerverifiedShow Answer

The aging of the baby boom generation has added to the growth of consumer credit.

Correct AnswerverifiedShow Answer

In the 5 Cs of credit,conditions refers to general economic conditions that can affect your ability to repay a loan.

Correct AnswerverifiedShow Answer

Which FICO credit score would represent the least risky borrower?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified