. What does leasing a car involve?
(Points: 2)
Purchasing a car from a car dealer rather than from the previous owner
Using a loan to buy the right to use a car only on specific days of the week
Paying off the car loan over a period of time that’s longer than the car is owned
Renting the car for a specific period of time and paying for its depreciation
2. When can a bank repossess someone’s car?
(Points: 2)
When the owner buys a used car
When the owner gets into an accident
When the owner cancels the insurance
When the owner defaults on the loan payments
3. Which of these makes a student loan different from other types of loans?
(Points: 2)
Students don’t have to provide any collateral to get a student loan.
Student loans are sponsored and guaranteed by the government.
The principal on a student loan is paid off before the interest is applied.
The payments on a student loan can’t be shown on an amortization table.
4. Which of these describes how a five/one ARM mortgage works?
(Points: 2)
The monthly payment is one-fifth of the total purchase price of the house.
The interest rate is fixed for five years and then changes every year afterward.
The interest rate charged on the mortgage is five times the normal interest rate.
The annual fees on the mortgage are only charged during the first five years of the loan.
5. What is one of the advantages of getting a government-sponsored mortgage instead of a conventional mortgage?
(Points: 2)
Government mortgages are easier to get approved than conventional mortgages.
Government mortgages allow home buyers to spend more money on their house.
Government mortgages charge lower interest rates than conventional mortgages.
Government mortgages prevent the government from taking the property for public use.
6. What is one advantage of using a credit card to make purchases?
(Points: 2)
You earn interest on your purchases.
You can buy something now and pay for it later.
You automatically improve your credit history.
You get instant access to your checking account.
7. Match each of the fees below with the situations where a credit card customer would get charged.
(Points: 2)
Matching:
Answer Potential Matches:
: Annual fee
1: The credit card company requires a yearly payment for the right to use the card.
2: You use a new credit card to pay off the $1,000 balance on another credit card.
3: You pay your minimum payment one week after the due date.
4: You withdraw $500 from an ATM using your credit card.
: Balance transfer fee
: Cash advance fee
: Late payment fee
8. Why is it important for people to maintain a good credit history?
(Points: 2)
So that the IRS won’t investigate them for tax fraud
So that it’s easier to list the expenses on their personal budget
So that they know all of the fees associated with their credit cards
So that they have an easier time getting loans and credit cards
9. Which of these credit card features would be best for customers who think they might not be able to pay their balance at the end of each month?
(Points: 2)
No fees for cash advances
A high balance transfer limit
A low annual percentage rate
An annual fee that can be waived
10. Match each of the credit card terms with its definition.
(Points: 2)
Matching:
Answer Potential Matches:
: Annual percentage rate
1: Number of days to run a balance before fees or interest are charged.
2: A listing of a person’s financial information and history
3: A credit card with money in a savings account to act as collateral.
4: The amount of interest paid on unpaid balances.
: Grace period
: Secured card
: Credit report