Question 1

Which federal consumer credit law regulates the advertising of credit terms?

Accepted Answer

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

Question 2

The market value of Karen's home is $120,000 and the balance on her mortgage loan is $80,000.The lender has agreed to let her borrow up to 75% of the total value of her home less the mortgage.How much can she borrow with a home equity loan?

Accepted Answer

A)  $10,000
B)  $40,000
C)  $80,000
D)  $90,000
E)  $120,000F) None of the above
G) A) and C)

Question 3

Jane Calvert is applying for a loan from a bank.The bank knows she owns a house worth $160,000 and a car with a trade-in value of $12,000 as well as other personal assets worth approximately $44,000.Which one of the 5 Cs of credit is the bank looking at?

Accepted Answer

A)  Character
B)  Capacity
C)  Capital
D)  Collateral
E)  ConditionsF) B) and D)
G) C) and D)

Question 4

The borrower's financial ability to meet credit obligations is called:

Accepted Answer

A)  capacity.
B)  character.
C)  capital.
D)  collateral.
E)  conditions.F) A) and E)
G) None of the above

Question 5

Which one of the following is not included in the 5 C's of credit?

Accepted Answer

A)  Conditions
B)  Cash flow
C)  Collateral
D)  Capacity
E)  CharacterF) C) and D)
G) A) and B)

Question 6

The maximum dollar amount of credit the lender has made available to you is called:

Accepted Answer

A)  revolving credit.
B)  line of credit.
C)  convenience credit.
D)  installment cash credit.
E)  single lump-sum credit.F) B) and D)
G) A) and E)

Question 7

A loan officer is examining your income and the amount of your existing debt payments and monthly expenses in deciding whether to make a loan to you today.Which aspect of the 5 Cs of lending is the loan officer most likely looking at?

Accepted Answer

A)  Character
B)  Capacity
C)  Capital
D)  Collateral
E)  ConditionsF) A) and E)
G) A) and D)

Question 8

If your debit card is lost or stolen,you must work directly with the issuer.

Accepted Answer

A) True 
 B)False

Question 9

Which one of the following is not a source that provides data to credit bureaus?

Accepted Answer

A)  Banks
B)  Finance companies
C)  Credit card companies
D)  Court records
E)  Internal Revenue ServiceF) A) and E)
G) A) and B)

Question 10

If your identity is stolen,the Federal Trade Commission recommends that you take what three actions immediately?

Accepted Answer

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

Question 11

With a revolving line of credit,borrowings are permitted up to a specified limit and for a stated period,usually 5 to 10 years.

Accepted Answer

A) True 
 B)False

Question 12

It is safer to use credit,since charge accounts and credit cards let you shop and travel without carrying a large amount of cash.

Accepted Answer

A) True 
 B)False

Question 13

Jake Smith purchases a big screen TV on credit and will repay the loan with one payment at the end of 90 days.What type of credit did Jake use?

Accepted Answer

A)  Installment sales credit
B)  Installment cash credit
C)  Single lump-sum credit
D)  Revolving check credit
E)  Open-end creditF) A) and E)
G) B) and D)

Question 14

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

Accepted Answer

A)  Potential bankruptcy
B)  Spending beyond your budget
C)  Providing help in emergencies
D)  Committing future income to pay for current purchases
E)  Incurring interest chargesF) A) and E)
G) A) and D)

Question 15

College students are not a prime target for credit card issuers.

Accepted Answer

A) True 
 B)False

Question 16

What is revolving check credit?

Accepted Answer

Revolving check credit is a prearranged ...

Question 17

The larger the debt-to-equity ratio,the riskier the situation is for lenders and borrowers.

Accepted Answer

A) True 
 B)False

Question 18

Installment sales credit is a loan that allows you to receive high-priced items,such as large appliances or furniture.

Accepted Answer

A) True 
 B)False

Question 19

Co-branded 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 of these are correct.F) A) and B)
G) A) and C)

Question 20

When activating a new credit card,consumers are warned to watch for "the pitch." Describe "the pitch."

Accepted Answer

When activating a new credit card,you ma...

Exam 6: Introduction to Consumer Credit

If your identity is stolen,the Federal Trade Commission recommends that you take what three actions immediately?

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

The maximum dollar amount of credit the lender has made available to you is called:

Correct AnswerverifiedShow Answer

Jane Calvert is applying for a loan from a bank.The bank knows she owns a house worth $160,000 and a car with a trade-in value of $12,000 as well as other personal assets worth approximately $44,000.Which one of the 5 Cs of credit is the bank looking at?

Correct AnswerverifiedShow Answer

Which one of the following is not a source that provides data to credit bureaus?

Correct AnswerverifiedShow Answer

The borrower's financial ability to meet credit obligations is called:

Correct AnswerverifiedShow Answer

Installment sales credit is a loan that allows you to receive high-priced items,such as large appliances or furniture.

Correct AnswerverifiedShow Answer

Which federal consumer credit law regulates the advertising of credit terms?

Correct AnswerverifiedShow Answer

Co-branded credit cards:

Correct AnswerverifiedShow Answer

With a revolving line of credit,borrowings are permitted up to a specified limit and for a stated period,usually 5 to 10 years.

Correct AnswerverifiedShow Answer

Which one of the following is not included in the 5 C's of credit?

Correct AnswerverifiedShow Answer

It is safer to use credit,since charge accounts and credit cards let you shop and travel without carrying a large amount of cash.

Correct AnswerverifiedShow Answer

The larger the debt-to-equity ratio,the riskier the situation is for lenders and borrowers.

Correct AnswerverifiedShow Answer

The market value of Karen's home is $120,000 and the balance on her mortgage loan is $80,000.The lender has agreed to let her borrow up to 75% of the total value of her home less the mortgage.How much can she borrow with a home equity loan?

Correct AnswerverifiedShow Answer

A loan officer is examining your income and the amount of your existing debt payments and monthly expenses in deciding whether to make a loan to you today.Which aspect of the 5 Cs of lending is the loan officer most likely looking at?

Correct AnswerverifiedShow Answer

College students are not a prime target for credit card issuers.

Correct AnswerverifiedShow Answer

What is revolving check credit?

Correct AnswerverifiedRevolving check credit is a prearranged ...View AnswerShow Answer

Jake Smith purchases a big screen TV on credit and will repay the loan with one payment at the end of 90 days.What type of credit did Jake use?

Correct AnswerverifiedShow Answer

If your debit card is lost or stolen,you must work directly with the issuer.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When activating a new credit card,consumers are warned to watch for "the pitch." Describe "the pitch."

Correct AnswerverifiedWhen activating a new credit card,you ma...View AnswerShow Answer

Correct Answer
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If your identity is stolen,take three ac...
View Answer

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verified
Revolving check credit is a prearranged ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified
When activating a new credit card,you ma...
View Answer