Question 1

You may be able to borrow at a lower interest rate if you accept a shorter-term loan.

Accepted Answer

A) True 
 B)False

Question 2

Credit disability insurance can be used when the borrower is unable to pay back a loan in a case of illness or injury.

Accepted Answer

A) True 
 B)False

Question 3

The disadvantage of using an interest only line of credit is the considerably longer time it takes to repay the loan in comparison to a traditional consumer installment loan.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following are signs of debt problems?

Accepted Answer

A)   foreclosure proceedings.
B)   overdue payments.
C)   approaching credit limits.
D)   A and B are correct.
E)   A,B and C are correct.F) C) and D)
G) B) and C)

Question 5

For some debtors,bankruptcy has become an acceptable tool of credit management.

Accepted Answer

A) True 
 B)False

Question 6

If creditors give you no credit for payments made during the billing period,this is called the

Accepted Answer

A)   APR method.
B)   discount method.
C)   previous balance method.
D)   adjusted balance method.
E)   average daily balance method.F) A) and D)
G) B) and C)

Question 7

Increasingly,the bankruptcy debtor is likely to be female.

Accepted Answer

A) True 
 B)False

Question 8

The most commonly purchased type of credit insurance is credit life insurance.

Accepted Answer

A) True 
 B)False

Question 9

The interest rate on a collateralized loan is relatively low,but one of the disadvantages of such loans is that

Accepted Answer

A)   the loan must be repaid in a short period of time.
B)   the assets used as collateral are tied up until the loan has been repaid.
C)   the loan is difficult to obtain.
D)   commercial banks do not make such loans.
E)   you ruin your credit rating.F) A) and B)
G) None of the above

Question 10

What is the EAR for a $100 loan when the interest is compounded monthly and the stated annual interest rate is 7 percent?

Accepted Answer

A)   7.0 percent
B)   8.0 percent
C)   7.23 percent
D)   12.0 percent
E)   16.0 percentF) D) and E)
G) A) and B)

Question 11

The fairest method of calculating the interest is the adjusted balance method.

Accepted Answer

A) True 
 B)False

Question 12

Paying only the minimum balance each month on credit card bills is a signal of potential debt problems.

Accepted Answer

A) True 
 B)False

Question 13

Membership in credit unions has been

Accepted Answer

A)   growing steadily.
B)   declining gradually.
C)   static.
D)   restricted by the Tax Act.
E)   restricted by provincial laws.F) A) and D)
G) A) and B)

Question 14

You can often obtain medium-priced loans from

Accepted Answer

A)   parents or family members.
B)   American Express.
C)   commercial banks and credit unions.
D)   finance companies.
E)   retailers.F) A) and C)
G) None of the above

Question 15

In a straight bankruptcy many,but not all,debts are forgiven.

Accepted Answer

A) True 
 B)False

Question 16

Credit costs usually do not vary.

Accepted Answer

A) True 
 B)False

Question 17

In financial institutions,the sources of credit:

Accepted Answer

A)   come in all shapes and sizes.
B)   play an important role in our economy.
C)   are typically short term
D)   A and B are correct
E)   A,B and C are correctF) A) and B)
G) All of the above

Question 18

Credit life insurance provides for the repayment of the loan if the borrower dies.

Accepted Answer

A) True 
 B)False

Question 19

Credit counselors will aid families by

Accepted Answer

A)   setting up a budget for them.
B)   paying off their loans.
C)   providing free basic necessities.
D)   providing one month free shelter.
E)   relocating them in less expensive areas.F) A) and C)
G) C) and D)

Question 20

If you want to take advantage of the interest-free period on your credit card,you must pay your bill in full every month.

Accepted Answer

A) True 
 B)False

Exam 6: Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

In a straight bankruptcy many,but not all,debts are forgiven.

Correct AnswerverifiedShow Answer

You may be able to borrow at a lower interest rate if you accept a shorter-term loan.

Correct AnswerverifiedShow Answer

Membership in credit unions has been

Correct AnswerverifiedShow Answer

For some debtors,bankruptcy has become an acceptable tool of credit management.

Correct AnswerverifiedShow Answer

Paying only the minimum balance each month on credit card bills is a signal of potential debt problems.

Correct AnswerverifiedShow Answer

Increasingly,the bankruptcy debtor is likely to be female.

Correct AnswerverifiedShow Answer

What is the EAR for a $100 loan when the interest is compounded monthly and the stated annual interest rate is 7 percent?

Correct AnswerverifiedShow Answer

Credit disability insurance can be used when the borrower is unable to pay back a loan in a case of illness or injury.

Correct AnswerverifiedShow Answer

In financial institutions,the sources of credit:

Correct AnswerverifiedShow Answer

Which of the following are signs of debt problems?

Correct AnswerverifiedShow Answer

The interest rate on a collateralized loan is relatively low,but one of the disadvantages of such loans is that

Correct AnswerverifiedShow Answer

The fairest method of calculating the interest is the adjusted balance method.

Correct AnswerverifiedShow Answer

If creditors give you no credit for payments made during the billing period,this is called the

Correct AnswerverifiedShow Answer

The disadvantage of using an interest only line of credit is the considerably longer time it takes to repay the loan in comparison to a traditional consumer installment loan.

Correct AnswerverifiedShow Answer

Credit counselors will aid families by

Correct AnswerverifiedShow Answer

The most commonly purchased type of credit insurance is credit life insurance.

Correct AnswerverifiedShow Answer

If you want to take advantage of the interest-free period on your credit card,you must pay your bill in full every month.

Correct AnswerverifiedShow Answer

You can often obtain medium-priced loans from

Correct AnswerverifiedShow Answer

Credit costs usually do not vary.

Correct AnswerverifiedShow Answer

Credit life insurance provides for the repayment of the loan if the borrower dies.

Correct AnswerverifiedShow Answer

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