Question 1

A term that refers to the borrower's assets or net worth is called

Accepted Answer

A)   capacity.
B)   character.
C)   capital.
D)   collateral.
E)   conditions.F) A) and D)
G) B) and D)

Question 2

Although credit permits more immediate satisfaction of needs and desires, it

Accepted Answer

A)   does increase total purchasing power.
B)   is always best to avoid credit purchases.
C)   does not diminish your ability to buy more goods and services on credit.
D)   has no opportunity costs attached to it.
E)   does not increase total purchasing powerF) C) and D)
G) A) and C)

Question 3

Which of the following is not an example of a consumer loan?

Accepted Answer

A)   home mortgage
B)   automobile loan
C)   revolving credit
D)   debt consolidation loan
E)   demand loanF) A) and D)
G) B) and D)

Question 4

What can you do if your identity is stolen?

Accepted Answer

If your identity is stolen, take three a...

Question 5

Financing from car dealers in affiliation with car manufacturers is called a conditional sales contract.

Accepted Answer

A) True 
 B)False

Question 6

With an open-end credit, you pay back one-time loans in a specified period of time in equal amounts.

Accepted Answer

A) True 
 B)False

Question 7

The debt-to-equity ratio is calculated by dividing your total liabilities by your net worth.

Accepted Answer

A) True 
 B)False

Question 8

The credit cardholders who pay off their balances in full each month are known as convenience users.

Accepted Answer

A) True 
 B)False

Question 9

Perhaps the greatest disadvantage of using credit is the temptation to overspend.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is considered to be a consumer loan?

Accepted Answer

A)   Debit card
B)   Credit loan
C)   Personal line of credit
D)   Overdraft protection
E)   Mortgage loanF) A) and E)
G) B) and D)

Question 11

Briefly list and describe the costs associated with credit cards

Accepted Answer

The major fees charged to customers are ...

Question 12

Which of these is a characteristic of Paypal?

Accepted Answer

A)   Facilitates online auction payments.
B)   Offers password protected accounts.
C)   Allows use of credit cards.
D)   Transfers funds in U.S. dollars.
E)   All are characteristics of PaypalF) B) and D)
G) A) and B)

Question 13

In a closed-end credit, loans are made on a continuous basis and you make at least partial payment.

Accepted Answer

A) True 
 B)False

Question 14

The advantages of credit include

Accepted Answer

A)   can purchase goods even when funds are low
B)   carrying credit cards is safer than carrying cash
C)   a credit card can allow you to carry up to a 30 day "float
D)   credit cards may be used for identification when cashing a cheque
E)   all of these are advantages of creditF) A) and C)
G) None of the above

Question 15

"Shopaholics" and young adults are most vulnerable to misusing credit.

Accepted Answer

A) True 
 B)False

Question 16

A good example of an open-end credit is

Accepted Answer

A)   the use of a bank credit card to make a purchase.
B)   the mortgage loan from a savings and loan institution.
C)   automobile loan from a credit union.
D)   installment loan from a furniture store.
E)   installment loan for purchasing a major appliance.F) B) and E)
G) B) and C)

Question 17

What are the two general rules of measuring credit capacity?

Accepted Answer

The two general rules of measuring credi...

Question 18

Collateral refers to the borrower's assets or net worth.

Accepted Answer

A) True 
 B)False

Question 19

Most creditors rely heavily on borrowers' bank reports when considering loan applications.

Accepted Answer

A) True 
 B)False

Question 20

The borrower's attitude toward his or her credit obligations is called

Accepted Answer

A)   capacity.
B)   capital.
C)   character.
D)   collateral.
E)   conditions.F) C) and D)
G) B) and D)

Exam 5: Introduction to Consumer Credit

Most creditors rely heavily on borrowers' bank reports when considering loan applications.

Correct AnswerverifiedShow Answer

With an open-end credit, you pay back one-time loans in a specified period of time in equal amounts.

Correct AnswerverifiedShow Answer

Perhaps the greatest disadvantage of using credit is the temptation to overspend.

Correct AnswerverifiedShow Answer

What can you do if your identity is stolen?

Correct AnswerverifiedIf your identity is stolen, take three a...View AnswerShow Answer

"Shopaholics" and young adults are most vulnerable to misusing credit.

Correct AnswerverifiedShow Answer

Financing from car dealers in affiliation with car manufacturers is called a conditional sales contract.

Correct AnswerverifiedShow Answer

Collateral refers to the borrower's assets or net worth.

Correct AnswerverifiedShow Answer

The borrower's attitude toward his or her credit obligations is called

Correct AnswerverifiedShow Answer

A term that refers to the borrower's assets or net worth is called

Correct AnswerverifiedShow Answer

A good example of an open-end credit is

Correct AnswerverifiedShow Answer

What are the two general rules of measuring credit capacity?

Correct AnswerverifiedThe two general rules of measuring credi...View AnswerShow Answer

Briefly list and describe the costs associated with credit cards

Correct AnswerverifiedThe major fees charged to customers are ...View AnswerShow Answer

In a closed-end credit, loans are made on a continuous basis and you make at least partial payment.

Correct AnswerverifiedShow Answer

Although credit permits more immediate satisfaction of needs and desires, it

Correct AnswerverifiedShow Answer

The debt-to-equity ratio is calculated by dividing your total liabilities by your net worth.

Correct AnswerverifiedShow Answer

Which of the following is considered to be a consumer loan?

Correct AnswerverifiedShow Answer

The credit cardholders who pay off their balances in full each month are known as convenience users.

Correct AnswerverifiedShow Answer

The advantages of credit include

Correct AnswerverifiedShow Answer

Which of the following is not an example of a consumer loan?

Correct AnswerverifiedShow Answer

Which of these is a characteristic of Paypal?

Correct AnswerverifiedShow Answer

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If your identity is stolen, take three a...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The two general rules of measuring credi...
View Answer

Correct Answer
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The major fees charged to customers are ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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