Question 1

If you borrow $100 at 10 percent interest,how much will you repay in one lump-sum at the end of one year using simple interest?

Accepted Answer

A)  $100.
B)  $105.
C)  $110.
D)  $115.
E)  $120F) C) and D)
G) A) and B) C

Question 2

If you find that you cannot make your payments,the first thing you should do is:

Accepted Answer

A)  skip town.
B)  declare personal bankruptcy.
C)  borrow from a loan shark to make the payment.
D)  let the borrower go to a collection agency.
E)  contact your creditors and try to work out a modified payment plan with them.F) D) and E)
G) C) and E)

Question 3

Sarah Parker's husband goes out with the 'boys' for a night on the town and gets home at 4 am waking everyone in the house.In response,Sarah goes out the next day and spends $500 in new clothes for herself putting it all on her credit card.Which one of thefollowing best explains Sarah's spending,which can cause overindebtedness?

Accepted Answer

A)  Misunderstanding or lack of communication
B)  The use of money to punish
C)  The expectation of instant comfort
D)  Keeping up with the Joneses
E)  Overindulgence of childrenF) B) and C)
G) A) and B)

Question 4

Gary Simpson notices that his neighbor has a brand new Ford F150 truck parked in the driveway.Even though his current car is fine,Gary decides that he needs a new car and goes out and purchases a Tundra with a six-year loan.Which one of the following bestexplains Gary's spending,which can lead to overindebtedness?

Accepted Answer

A)  Misunderstanding or lack of communication
B)  The use of money to punish
C)  The expectation of instant comfort
D)  Keeping up with the Joneses
E)  Overindulgence of childrenF) A) and D)
G) C) and D) D

Question 5

In a Chapter 7 bankruptcy,the debtor:

Accepted Answer

A)  is required to draw up a petition listing his or her assets and liabilities.
B)  does not have to pay a filing fee.
C)  is called a "bankrupt."
D)  does not have to pay outstanding alimony and child support payments.
E)  does not have to repay educational loans.F) C) and D)
G) B) and D)

Question 6

Jeff Bloom wants to have a house just like the one his parents had when he was a teenager.He finds the house he wants and gets an interest-only loan on it for the first five years.Which one of the following best explains Jeff's spending,which can lead to overindebtedness?

Accepted Answer

A)  Misunderstanding or lack of communication
B)  The use of money to punish
C)  The expectation of instant comfort
D)  Keeping up with the Joneses
E)  Overindulgence of childrenF) B) and E)
G) A) and D)

Question 7

Buying on credit is almost always cheaper than paying cash.

Accepted Answer

A) True 
 B)False  False

Question 8

In open-end credit,what are the various systems creditors use to calculate the balance on which they assess finance charges?

Accepted Answer

Creditors use the following me...

Question 9

The CCCS aids families by:

Accepted Answer

A)  setting up a realistic 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) B) and D)
G) All of the above

Question 10

An increasing number of bankruptcy filers are well-educated,middle-class baby boomers.

Accepted Answer

A) True 
 B)False

Question 11

This morning,you received a phone call alleging you owe a debt.If you dispute this debt,you must write to the debt collector and request verification of the obligation.How many days do you have to send this letter?

Accepted Answer

A)  5
B)  10
C)  15
D)  20
E)  30F) A) and C)
G) B) and D)

Question 12

A few months ago,you sent a certified letter to a debt collector and requested verification of a debt the collector says you owe.You know the letter was received by the collector but you have not received a response to your request.Today,you received a letterthreatening court action.What should you do?

Accepted Answer

A)  Pay the debt and protect your credit rating
B)  Insist that communications about the debt cease
C)  Renegotiate payment terms with the creditor
D)  Sue the collection agency
E)  Pay half the outstanding balanceF) None of the above
G) A) and B)

Question 13

The most commonly purchased type of credit insurance is:

Accepted Answer

A)  credit life insurance.
B)  credit accident insurance.
C)  credit health insurance.
D)  credit property insurance.
E)  credit disability insurance.F) A) and B)
G) A) and C)

Question 14

Which method of payment is almost always cheaper than using credit?

Accepted Answer

A)  Bank credit card
B)  Check written on a home equity line of credit
C)  Cash
D)  Store credit card
E)  Cash advance on a Visa credit cardF) B) and C)
G) A) and E)

Question 15

The Consumer Credit Counseling Service counseling is usually free.

Accepted Answer

A) True 
 B)False

Question 16

If you declare a Chapter 7 bankruptcy,you do not have to pay alimony,child support,or educational loans.

Accepted Answer

A) True 
 B)False

Question 17

Explain simple interest.

Accepted Answer

Simple interest is the interest computed...

Question 18

Excessive indebtedness can result in:

Accepted Answer

A)  heavy drinking.
B)  a neglect of children.
C)  marital difficulties.
D)  drug abuse.
E)  All of these.F) C) and D)
G) A) and B)

Question 19

Chuck Stallings qualifies for an American Express card.Which of the following offers this type of loan?

Accepted Answer

A)  Credit union
B)  Payday advance company
C)  Finance company
D)  T&E card
E)  Commercial bankF) None of the above
G) A) and E)

Question 20

What are two key concepts to remember if you are thinking of borrowing money or opening a credit account?

Accepted Answer

Two key concepts are the finance charge ...

Exam 7: Choosing a Source of Credit: The Costs of Credit Alternatives

If you borrow $100 at 10 percent interest,how much will you repay in one lump-sum at the end of one year using simple interest?

Correct Answer
verified
C

If you find that you cannot make your payments,the first thing you should do is:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

In a Chapter 7 bankruptcy,the debtor:

Correct Answer
verified

Jeff Bloom wants to have a house just like the one his parents had when he was a teenager.He finds the house he wants and gets an interest-only loan on it for the first five years.Which one of the following best explains Jeff's spending,which can lead to overindebtedness?

Correct Answer
verified

Buying on credit is almost always cheaper than paying cash.

Correct Answer
verified
False

In open-end credit,what are the various systems creditors use to calculate the balance on which they assess finance charges?

Correct Answer
verified
Creditors use the following me...
View Answer

The CCCS aids families by:

Correct Answer
verified

An increasing number of bankruptcy filers are well-educated,middle-class baby boomers.

Correct Answer
verified

This morning,you received a phone call alleging you owe a debt.If you dispute this debt,you must write to the debt collector and request verification of the obligation.How many days do you have to send this letter?

Correct Answer
verified

Correct Answer
verified

The most commonly purchased type of credit insurance is:

Correct Answer
verified

Which method of payment is almost always cheaper than using credit?

Correct Answer
verified

The Consumer Credit Counseling Service counseling is usually free.

Correct Answer
verified

If you declare a Chapter 7 bankruptcy,you do not have to pay alimony,child support,or educational loans.

Correct Answer
verified

Explain simple interest.

Correct Answer
verified
Simple interest is the interest computed...
View Answer

Excessive indebtedness can result in:

Correct Answer
verified

Chuck Stallings qualifies for an American Express card.Which of the following offers this type of loan?

Correct Answer
verified

What are two key concepts to remember if you are thinking of borrowing money or opening a credit account?

Correct Answer
verified
Two key concepts are the finance charge ...
View Answer

Exam 7: Choosing a Source of Credit: The Costs of Credit Alternatives

If you borrow $100 at 10 percent interest,how much will you repay in one lump-sum at the end of one year using simple interest?

Correct AnswerverifiedC

If you find that you cannot make your payments,the first thing you should do is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedD

In a Chapter 7 bankruptcy,the debtor:

Correct AnswerverifiedShow Answer

Jeff Bloom wants to have a house just like the one his parents had when he was a teenager.He finds the house he wants and gets an interest-only loan on it for the first five years.Which one of the following best explains Jeff's spending,which can lead to overindebtedness?

Correct AnswerverifiedShow Answer

Buying on credit is almost always cheaper than paying cash.

Correct AnswerverifiedFalse

In open-end credit,what are the various systems creditors use to calculate the balance on which they assess finance charges?

Correct AnswerverifiedCreditors use the following me...View AnswerShow Answer

The CCCS aids families by:

Correct AnswerverifiedShow Answer

An increasing number of bankruptcy filers are well-educated,middle-class baby boomers.

Correct AnswerverifiedShow Answer

This morning,you received a phone call alleging you owe a debt.If you dispute this debt,you must write to the debt collector and request verification of the obligation.How many days do you have to send this letter?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The most commonly purchased type of credit insurance is:

Correct AnswerverifiedShow Answer

Which method of payment is almost always cheaper than using credit?

Correct AnswerverifiedShow Answer

The Consumer Credit Counseling Service counseling is usually free.

Correct AnswerverifiedShow Answer

If you declare a Chapter 7 bankruptcy,you do not have to pay alimony,child support,or educational loans.

Correct AnswerverifiedShow Answer

Explain simple interest.

Correct AnswerverifiedSimple interest is the interest computed...View AnswerShow Answer

Excessive indebtedness can result in:

Correct AnswerverifiedShow Answer

Chuck Stallings qualifies for an American Express card.Which of the following offers this type of loan?

Correct AnswerverifiedShow Answer

What are two key concepts to remember if you are thinking of borrowing money or opening a credit account?

Correct AnswerverifiedTwo key concepts are the finance charge ...View AnswerShow Answer

Correct Answer
verified
C

Correct Answer
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Correct Answer
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Correct Answer
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D

Correct Answer
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Correct Answer
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Correct Answer
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False

Correct Answer
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Creditors use the following me...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Simple interest is the interest computed...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Two key concepts are the finance charge ...
View Answer