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Answered: - Experts only! Quiz: Consumer Credit Issues and Bankruptcy


Experts only!

Quiz: Consumer Credit Issues and Bankruptcy

Contains 20 multiple choice questions worth 1 point each.

40 min has been allotted for the quiz.

Must take the quiz now and submit solution in 40 minutes and counting... This is an online quiz and the timer has begun. I am standing by for solution within the 40 min constraint. Thanks in advance.


Quiz: Consumer Credit Issues and Bankruptcy

 

Contains 20 multiple choice questions worth 1 point each.

 

40 min has been allotted for the quiz.

 

Must take the quiz now and submit solution in 40 minutes and counting... This is an online

 

quiz and the timer has begun. I am standing by for solution within the 40 min constraint.

 

Thanks in advance.

 


 

1. (TCO 3) _____ is a good example of a closed-end credit. (Points : 1)

 

A credit card issued by a department store

 

A credit card issued by VISA or MasterCard

 

A mortgage loan

 

Using a cashier's check to pay for a purchase

 

Using overdraft protection at a bank

 


 

Question 2. 2. (TCO 3) A creditor may set a maximum amount of credit that a person is allowed, and

 

this is called a(n) (Points : 1)

 

revolving credit.

 

line of credit.

 

convenience credit.

 

installment cash credit.

 

single lump-sum credit.

 


 

Question 3. 3. (TCO 3) If your monthly net (after-tax) income is $2,200, what should be your maximum

 

amount spent on credit payments? (Points : 1)

 

$150

 


 

$220

 

$440

 

$500

 

$660

 


 

Question 4. 4. (TCO 3) Which one of these items can be included in your credit report? (Points : 1)

 

Race

 

Marital status

 

Sex

 

Nationality

 

Religion

 


 

Question 5. 5. (TCO 3) All of the following provide data to credit bureaus except (Points : 1)

 

banks.

 

finance companies.

 

merchants.

 

court records.

 

the Internal Revenue Service.

 


 

Question 6. 6. (TCO 3) Personal bankruptcy can be reported to credit bureaus for _____ years.

 

(Points : 1)

 

5

 

7

 

10

 


 

15

 

25

 


 

Question 7. 7. (TCO 3) If a bank needs to examine the value of a specific asset when you are applying

 

for a loan, this process refers to which aspect of the five Cs of lending? (Points : 1)

 

Character

 

Capacity

 

Collateral

 

Capital

 

Conditions

 


 

Question 8. 8. (TCO 3) When a lender examines your job situation and the security of your

 

employment, it is considering which area of lending? (Points : 1)

 

Capacity

 

Character

 

Capital

 

Collateral

 

Conditions

 


 

Question 9. 9. (TCO 3) Which one of the selections can be categorized as an advantage of credit?

 

(Points : 1)

 

The use of credit can lead to court action and bankruptcy.

 

The use of credit can lead to overspending.

 

The use of credit can lead to anxiety.

 

The use of credit ties up the use of future income.

 


 

The use of credit allows for the purchase of goods even when funds are low.

 


 

Question 10. 10. (TCO 3) Which one of the selections can be categorized as a disadvantage of credit?

 

(Points : 1)

 

The use of credit can allow you to receive advance notice of sales.

 

The use of credit can allow for you to purchase previously inaccessible items.

 

The use of credit allows for the purchase of goods even when funds are low.

 

The use of credit can allow for the easier return of merchandise.

 

The use of credit can lead to overspending.

 


 

Question 11. 11. (TCO 3) By evaluating your credit options, you can do all of the following except

 

(Points : 1)

 

reduce your finance charges.

 

reconsider your decision to borrow money.

 

discover a less expensive type of loan.

 

find a lender that charges a lower rate.

 

purchase goods and services without specific limitations.

 


 

Question 12. 12. (TCO 3) Typically, a person can obtain the least expensive loan through (Points : 1)

 

parents or family members.

 

banks.

 

savings and loan associations.

 

finance companies.

 

loan sharks.

 


 

Question 13. 13. (TCO 3) Referring to trends in credit union membership, it can be observed that

 

membership has been (Points : 1)

 

restricted by the Tax Reform Act of 1986.

 

declining gradually.

 

static.

 

growing steadily.

 

restricted by state laws.

 


 

Question 14. 14. (TCO 3) Which one of the following is a signal of a potential debt problem? (Points :

 

1)

 

Paying the maximum balance due each month

 

Borrowing money to pay old debts

 

Using savings to pay for major purchases

 

Receiving notice of prompt payment from creditors

 

Occasionally working overtime and moonlighting

 


 

Question 15. 15. (TCO 3) Allison Smith starts the month with a balance of $1,100 on her credit card.

 

On the 10th day of the month, she purchases $200 in clothes with her credit card. On the 15th day of the

 

month, she makes a payment on her credit card of $500. The average daily balance for the month

 

including the new purchase is $883. The average daily balance for the month excluding the new

 

purchase is $750. Allison's interest rate is 1.5% for the month. Allison's bank calculates the finance

 

charge on the credit card by using the adjusted balance method. What would Allison's finance charges

 

be for the month? (Points : 1)

 

$7.50

 

$9.00

 

$11.25

 

$13.25

 


 

$16.50

 


 

Question 16. 16. (TCO 3) Jerry Dean starts the month with a balance of $1,500 on his credit card. On

 

the 10th day of the month, he purchases $200 in clothes with his credit card. On the 15th day of the

 

month, he makes a payment on his credit card of $500. The average daily balance for the month

 

including the new purchase is $883. The average daily balance for the month excluding the new

 

purchase is $750. Jerry's interest rate is 1.5% for the month. Jerry's bank calculates the finance charge

 

on the credit card by using the previous balance method. What would Jerry's finance charges be for the

 

month? (Points : 1)

 

$7.50

 

$13.25

 

$15.00

 

$22.50

 

$18.00

 


 

Question 17. 17. (TCO 3) If Sarah goes out and spends $600 in new clothes for herself, putting it all on

 

her credit card after her husband returns at 4 a.m. the previous morning from a night on the town, this is

 

an example of which of the following? (Points : 1)

 

Misunderstanding or lack of communication

 

Keeping up with the Joneses

 

The expectation of instant comfort

 

The use of money to punish

 

Overindulgence of children

 


 

Question 18. 18. (TCO 3) One day, Gary notices that is neighbor has purchased a new Land Rover

 

and it is sitting in his driveway. Gary decides that he also needs a new car and goes out and purchases

 

a Hummer with a 6-year loan on it. Which reason for indebtedness is this an example of? (Points : 1)

 

Misunderstanding or lack of communication

 

Keeping up with the Joneses

 


 

The expectation of instant comfort

 

The use of money to punish

 

Overindulgence of children

 


 

Question 19. 19. (TCO 3) In terms of borrowing expenses, which of the following options would be

 

relatively the cheapest? (Points : 1)

 

Car dealer

 

Appliance store

 

Department store

 

Relative

 

Finance company

 


 

Question 20. 20. (TCO 3) If Marjorie Wilcox borrows $200 for 1 year with an APR of 12% and an

 

annual service fee of $10, what is her total cost of credit? (Points : 1)

 

$10

 

$12

 

$24

 

$34

 

$42

 


 

 


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