Question 1

Interest is a periodic charge for the use of credit,or other finance charges.

Accepted Answer

A) True 
 B)False

Question 2

Which of these is not a true statement? To avoid online fraud,you should _________.

Accepted Answer

A)   keep your personal information private.
B)   review your monthly bank and credit card statements.
C)   give your password only to your internet service provider.
D)   use a secure browser.
E)   give payment information only to know known businesses.F) A) and E)
G) B) and D)

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

The debt-to-equity ratio is calculated by dividing your monthly debt payments (not including house payments)by your net worth.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Experts suggest that you spend no more than ____________ percent of your net income on credit purchases.

Accepted Answer

A)   10
B)   20
C)   30
D)   40
E)   50F) A) and E)
G) A) and D)

Question 8

The best way to maintain your credit rating is to

Accepted Answer

A)   use credit sparingly.
B)   pay cash for your purchases.
C)   repay your debts on time.
D)   declare a Chapter 7 bankruptcy.
E)   use as many credit cards as you can.F) A) and E)
G) B) and E)

Question 9

A home equity loan is based only on the amount you still owe on your mortgage.

Accepted Answer

A) True 
 B)False

Question 10

How do creditors determine your credit-worthiness?

Accepted Answer

Creditors determine credit wor...

Question 11

A credit card cash withdrawal always incurs interest from the moment of withdrawal.

Accepted Answer

A) True 
 B)False

Question 12

Experts suggest that you spend no more than 20 percent of your net income on credit payments.(However,15 percent is much better.)

Accepted Answer

A) True 
 B)False

Question 13

By paying cash for a purchase,you

Accepted Answer

A)   forgo the opportunity to keep the cash in an interest-bearing account.
B)   always get a cash discount.
C)   can build a better credit rating.
D)   get better personal service from store employees.
E)   have a better selection of goods than if you use credit.F) A) and E)
G) B) and E)

Question 14

A lender requires a cosigner even when a borrower meets the lender's criteria for making a loan.

Accepted Answer

A) True 
 B)False

Question 15

A line of credit is the maximum dollar amount of credit the lender has made available to you.

Accepted Answer

A) True 
 B)False

Question 16

If your debt-to-equity ratio is about ½,you have reached the upper limit of debt obligations.

Accepted Answer

A) True 
 B)False

Question 17

If your monthly net (after-tax) income is $1,500,what should be your maximum amount spent on credit payments?

Accepted Answer

A)   $200
B)   $300
C)   $400
D)   $500
E)   $600F) A) and B)
G) D) and E)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

How can you protect yourself against credit/debit card fraud?

Accepted Answer

Here are the ways to protect yourself fr...

Question 20

The use of credit can provide up to a 45day "float."

Accepted Answer

A) True 
 B)False

Exam 5: Consumer Credit: Advantages, Disadvantages, Sources, and Costs

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Experts suggest that you spend no more than 20 percent of your net income on credit payments.(However,15 percent is much better.)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

By paying cash for a purchase,you

Correct AnswerverifiedShow Answer

If your monthly net (after-tax) income is $1,500,what should be your maximum amount spent on credit payments?

Correct AnswerverifiedShow Answer

The use of credit can provide up to a 45day "float."

Correct AnswerverifiedShow Answer

A credit card cash withdrawal always incurs interest from the moment of withdrawal.

Correct AnswerverifiedShow Answer

A lender requires a cosigner even when a borrower meets the lender's criteria for making a loan.

Correct AnswerverifiedShow Answer

A line of credit is the maximum dollar amount of credit the lender has made available to you.

Correct AnswerverifiedShow Answer

A home equity loan is based only on the amount you still owe on your mortgage.

Correct AnswerverifiedShow Answer

Interest is a periodic charge for the use of credit,or other finance charges.

Correct AnswerverifiedShow Answer

The best way to maintain your credit rating is to

Correct AnswerverifiedShow Answer

Experts suggest that you spend no more than ____________ percent of your net income on credit purchases.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of these is not a true statement? To avoid online fraud,you should _________.

Correct AnswerverifiedShow Answer

How can you protect yourself against credit/debit card fraud?

Correct AnswerverifiedHere are the ways to protect yourself fr...View AnswerShow Answer

The debt-to-equity ratio is calculated by dividing your monthly debt payments (not including house payments)by your net worth.

Correct AnswerverifiedShow Answer

If your debt-to-equity ratio is about ½,you have reached the upper limit of debt obligations.

Correct AnswerverifiedShow Answer

How do creditors determine your credit-worthiness?

Correct AnswerverifiedCreditors determine credit wor...View AnswerShow Answer

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Here are the ways to protect yourself fr...
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Creditors determine credit wor...
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