Question 1

Steve Black has two children.He is buying each of them their own TV to put in their rooms so they do not have to join the rest of the family and watch TV together.Which one of the following best explains 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) C) and D)
G) B) and C)

Question 2

The Consumer Credit Counseling Service is supported by contributions from:

Accepted Answer

A)  banks.
B)  consumer finance companies.
C)  credit unions.
D)  merchants.
E)  All of theseF) A) and B)
G) B) and E)

Question 3

According to Fair Isaac Corporation,a personal bankruptcy can cause an immediate drop in your credit score of how many points?

Accepted Answer

A)  100
B)  150
C)  180
D)  210
E)  260F) B) and D)
G) D) and E)

Question 4

The Consumer Credit Counseling Service is affiliated with the:

Accepted Answer

A)  National Foundation for Consumer Credit.
B)  Federal Trade Commission.
C)  Better Business Bureau.
D)  U.S.Consumer Protection Agency.
E)  Federal Reserve Banks.F) A) and B)
G) B) and E)

Question 5

Which of the following lenders is generally sympathetic to borrowers with legitimate payment problems?

Accepted Answer

A)  Credit union
B)  Payday advance company
C)  Finance company
D)  Department store
E)  Commercial bankF) C) and E)
G) A) and E)

Question 6

In addition to the counseling services of the CCCS,nonprofit services are sometimes provided by:

Accepted Answer

A)  universities.
B)  military bases.
C)  credit unions.
D)  state and federal authorities.
E)  All of these.F) A) and E)
G) A) and C)

Question 7

If you want to take advantage of the interest-free period on your credit card,you must pay your bill in full every month.

Accepted Answer

A) True 
 B)False

Question 8

The finance charge may include which of the following:

Accepted Answer

A)  Interest costs
B)  Service charges
C)  Credit-related insurance premiums
D)  Appraisal fees
E)  All of theseF) B) and C)
G) B) and D)

Question 9

Explain the concept of "float."

Accepted Answer

Float refers to a certain number of days...

Question 10

Which of the following financially supports the Consumer Credit Counseling Service?

Accepted Answer

A)  National Foundation for Consumer Credit
B)  Community-minded organizations and individuals
C)  Federal Reserve Banks
D)  The Federal Home Loan Bank
E)  TaxpayersF) B) and E)
G) A) and C)

Question 11

Which one of the following is not a danger signal of potential debt problems?

Accepted Answer

A)  Paying the minimum balance due each month
B)  Receiving second or third payment notices from creditors
C)  Using savings to pay routine bills
D)  Repaying loans faster than required
E)  Depending on overtime and moonlighting to meet everyday expensesF) A) and E)
G) B) and C)

Question 12

In a Chapter 13 bankruptcy,the debtor normally keeps all or most of his or her property.

Accepted Answer

A) True 
 B)False

Question 13

Which form of bankruptcy allows a debtor with a regular income to extinguish his or her debts from future earnings or other property over a period of time?

Accepted Answer

A)  Chapter 7
B)  Chapter 11
C)  Chapter 13
D)  Chapter 15
E)  Chapter 17F) None of the above
G) C) and D)

Question 14

If your credit company invites you to skip a monthly payment without a penalty,they are doing you a favor.

Accepted Answer

A) True 
 B)False

Question 15

Patricia Newton is going to buy a new car,and she needs to apply for a loan to cover the purchase.She knows she can get a loan for up to 6 years,but she would prefer a shorter-term loan.She selects a 4-year loan.Patricia is lowering her lender's risk by:

Accepted Answer

A)  sharing the interest rate risk.
B)  pledging collateral.
C)  paying a larger cash deposit.
D)  repaying the loan faster.
E)  sharing inflation risk with her lender.F) A) and E)
G) A) and D)

Question 16

In what ways can you lower the risk to your lender in order to reduce your borrowing costs?

Accepted Answer

One can take one or more of the followin...

Question 17

The number of credit union members has been:

Accepted Answer

A)  growing steadily.
B)  declining gradually.
C)  static.
D)  restricted by the Tax Reform Act of 1986.
E)  restricted by state laws.F) B) and D)
G) B) and C)

Question 18

The Fair Debt Collection Practices Act regulates the ways debt collection agencies do business.

Accepted Answer

A) True 
 B)False

Question 19

Which one of the following is often the source of the least expensive loan?

Accepted Answer

A)  Parents or family members
B)  Banks
C)  Savings and loan associations
D)  Finance companies
E)  Loan sharksF) D) and E)
G) A) and B)

Question 20

With the add-on interest method,interest is calculated on the full amount of the original principal.

Accepted Answer

A) True 
 B)False

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

The Consumer Credit Counseling Service is affiliated with the:

Correct AnswerverifiedShow Answer

The Consumer Credit Counseling Service is supported by contributions from:

Correct AnswerverifiedShow Answer

With the add-on interest method,interest is calculated on the full amount of the original principal.

Correct AnswerverifiedShow Answer

Which one of the following is not a danger signal of potential debt problems?

Correct AnswerverifiedShow Answer

In a Chapter 13 bankruptcy,the debtor normally keeps all or most of his or her property.

Correct AnswerverifiedShow Answer

Which one of the following is often the source of the least expensive loan?

Correct AnswerverifiedShow Answer

Which of the following lenders is generally sympathetic to borrowers with legitimate payment problems?

Correct AnswerverifiedShow Answer

Which form of bankruptcy allows a debtor with a regular income to extinguish his or her debts from future earnings or other property over a period of time?

Correct AnswerverifiedShow Answer

Steve Black has two children.He is buying each of them their own TV to put in their rooms so they do not have to join the rest of the family and watch TV together.Which one of the following best explains Gary's spending,which can lead to overindebtedness?

Correct AnswerverifiedShow Answer

The finance charge may include which of the following:

Correct AnswerverifiedShow Answer

Which of the following financially supports the Consumer Credit Counseling Service?

Correct AnswerverifiedShow Answer

Patricia Newton is going to buy a new car,and she needs to apply for a loan to cover the purchase.She knows she can get a loan for up to 6 years,but she would prefer a shorter-term loan.She selects a 4-year loan.Patricia is lowering her lender's risk by:

Correct AnswerverifiedShow Answer

According to Fair Isaac Corporation,a personal bankruptcy can cause an immediate drop in your credit score of how many points?

Correct AnswerverifiedShow Answer

The Fair Debt Collection Practices Act regulates the ways debt collection agencies do business.

Correct AnswerverifiedShow Answer

In addition to the counseling services of the CCCS,nonprofit services are sometimes provided by:

Correct AnswerverifiedShow Answer

The number of credit union members has been:

Correct AnswerverifiedShow Answer

If you want to take advantage of the interest-free period on your credit card,you must pay your bill in full every month.

Correct AnswerverifiedShow Answer

Explain the concept of "float."

Correct AnswerverifiedFloat refers to a certain number of days...View AnswerShow Answer

In what ways can you lower the risk to your lender in order to reduce your borrowing costs?

Correct AnswerverifiedOne can take one or more of the followin...View AnswerShow Answer

If your credit company invites you to skip a monthly payment without a penalty,they are doing you a favor.

Correct AnswerverifiedShow Answer

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Float refers to a certain number of days...
View Answer

Correct Answer
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One can take one or more of the followin...
View Answer

Correct Answer
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