Question 1

According to many consumer organizations

Accepted Answer

A)  credit life insurance is the most important to have.
B)  credit accident insurance is most important to have.
C)  credit health insurance is the most important to have.
D)  credit life insurance is not needed by most borrowers.
E)  credit disability insurance is most important to have.F) None of the above
G) A) and B)

Question 2

The consumer credit laws require that an advance notice be given before repossessing a car.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

There are no costs involved in filing for a bankruptcy or submitting a consumer proposal.

Accepted Answer

A) True 
 B)False

Question 5

If creditors add finance charges after subtracting payments made during the billing period, this is called the

Accepted Answer

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

Question 6

The longer the term of the loan the greater the amount of interest charges that must be paid.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False  True

Question 8

In order to minimize complications, all loans to and from family members should

Accepted Answer

A)  be in writing
B)  state the interest rate, if there is an interest rate
C)  include a repayment schedule
D)  include the final payment date
E)  all of these should be includedF) C) and D)
G) All of the above

Question 9

Student loans to finance education beyond high school

Accepted Answer

A)  are available from the Government of Canada
B)  charge lower interest rates than commercial rates
C)  must be repaid with interest, just like car loans and mortgages
D)  cannot be cancelled because you were dissatisfied with your education
E)  all of these choices are correctF) All of the above
G) None of the above

Question 10

Which of the following are signs of debt problems?

Accepted Answer

A)  continually go over your spending limit
B)  use credit cards as a necessity rather than as a convenience
C)  always borrowing money to make it from one payday to the next
D)  you pay only interest or service charges monthly and do not reduce your total debt
E)  all these statements are signs of debt problems.F) A) and D)
G) None of the above E

Question 11

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 12

Banks often encourage you to make the maximum payment.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Inflation increases the purchasing power of money.

Accepted Answer

A) True 
 B)False

Question 15

Increasingly, the bankruptcy debtor is likely to be female.

Accepted Answer

A) True 
 B)False  True

Question 16

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) A) and E)
G) All of the above

Question 17

What is monthly payment for a $25,000 amortized loan to purchase a car payable over 5 years at an annual interest rate of 12%?

Accepted Answer

A)  $200
B)  $333
C)  $445
D)  $556
E)  $565F) A) and B)
G) C) and D)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Consumer credit counseling services are basically concerned with

Accepted Answer

A)  lending the money to destitute people.
B)  giving debtors food and shelter.
C)  helping destitute debtors to relocate in less expensive areas.
D)  preventing and solving the problems related to credit overextension.
E)  getting you more creditF) C) and D)
G) A) and E)

Question 20

If you declare bankruptcy, you, must continue to pay any alimony, child support, debts incurred through fraud and court costs.

Accepted Answer

A) True 
 B)False

Exam 6: Choosing a Source of Credit: The Costs of Credit Alternatives

According to many consumer organizations

Correct AnswerverifiedShow Answer

The consumer credit laws require that an advance notice be given before repossessing a car.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

There are no costs involved in filing for a bankruptcy or submitting a consumer proposal.

Correct AnswerverifiedShow Answer

If creditors add finance charges after subtracting payments made during the billing period, this is called the

Correct AnswerverifiedShow Answer

The longer the term of the loan the greater the amount of interest charges that must be paid.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedTrue

In order to minimize complications, all loans to and from family members should

Correct AnswerverifiedShow Answer

Student loans to finance education beyond high school

Correct AnswerverifiedShow Answer

Which of the following are signs of debt problems?

Correct AnswerverifiedE

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

Correct AnswerverifiedShow Answer

Banks often encourage you to make the maximum payment.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Inflation increases the purchasing power of money.

Correct AnswerverifiedShow Answer

Increasingly, the bankruptcy debtor is likely to be female.

Correct AnswerverifiedTrue

Which of the following are signs of debt problems?

Correct AnswerverifiedShow Answer

What is monthly payment for a $25,000 amortized loan to purchase a car payable over 5 years at an annual interest rate of 12%?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Consumer credit counseling services are basically concerned with

Correct AnswerverifiedShow Answer

If you declare bankruptcy, you, must continue to pay any alimony, child support, debts incurred through fraud and court costs.

Correct AnswerverifiedShow Answer

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True

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E

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True

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