Question 1

A float refers to:

Accepted Answer

A)   an interest charged for only a few days.
B)   something one enjoys in a parade.
C)   a home equity loan.
D)   a period when no interest is charged.
E)   a lump-sum loan from a credit union.F) A) and B)
G) C) and D)

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

According to consumer affairs experts, one of the nation's main family financial problems is

Accepted Answer

A)   that families don't prepare their budgets.
B)   over-indebtedness.
C)   over consumption.
D)   buying too much insurance.
E)   unemployment.F) B) and E)
G) B) and D)

Question 4

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) B) and E)
G) C) and D)

Question 5

What is the EAR for a $100 loan when the interest is compounded monthly and the stated annual interest rate is 7 percent?

Accepted Answer

A)   7.0 percent
B)   8.0 percent
C)   7.23 percent
D)   12.0 percent
E)   16.0 percentF) B) and C)
G) B) and D)

Question 6

Inflation decreases the purchasing power of money.

Accepted Answer

A) True 
 B)False

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

Which of the following may indicate potential debt problems?

Accepted Answer

A)   paying only the minimum balance each month.
B)   always borrowing to make it to next payday.
C)   your wages have been garnished to pay for debt.
D)   your utility company cuts off service because your bills are unpaid.
E)   paying only the minimum balance each month, always borrowing to make it to next payday, your wages have been garnished to pay for debt, and your utility company cuts off service because your bills are unpaid.F) A) and E)
G) All of the above

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

For some debtors, bankruptcy has become an acceptable tool of credit management.

Accepted Answer

A) True 
 B)False

Question 11

Inflation increases the purchasing power of money.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

A variable interest rate is based on fluctuating rates in the banking system, such as the prime rate.

Accepted Answer

A) True 
 B)False

Question 14

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 the choices are correctF) C) and E)
G) A) and C)

Question 15

What is monthly payment for a $20,000 amortized loan to purchase a car payable over 3 years at an annual interest rate of 6%?

Accepted Answer

A)   $387
B)   $556
C)   $578
D)   $608
E)   $588F) B) and D)
G) B) and C)

Question 16

Referring to over indebtedness as one of the nation's main family financial problems, an expert on consumer affairs lists 7 frequent reasons for indebtedness. List and briefly describe these.

Accepted Answer

1. Emotional problems, such as the need ...

Question 17

You can often obtain medium-priced loans from

Accepted Answer

A)   parents or family members.
B)   American Express.
C)   commercial banks and credit unions.
D)   finance companies.
E)   retailers.F) A) and E)
G) B) and D)

Question 18

Membership in credit unions has been

Accepted Answer

A)   growing steadily.
B)   declining gradually.
C)   static.
D)   restricted by the Tax Act.
E)   restricted by provincial laws.F) All of the above
G) None of the above

Question 19

You have two choices in declaring personal bankruptcy: A consumer proposal or declaration through an assignment in bankruptcy.

Accepted Answer

A) True 
 B)False

Question 20

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) B) and E)
G) A) and C)

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

Inflation decreases the purchasing power of money.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Student loans to finance education beyond high school

Correct AnswerverifiedShow Answer

What is the EAR for a $100 loan when the interest is compounded monthly and the stated annual interest rate is 7 percent?

Correct AnswerverifiedShow Answer

Referring to over indebtedness as one of the nation's main family financial problems, an expert on consumer affairs lists 7 frequent reasons for indebtedness. List and briefly describe these.

Correct Answerverified1. Emotional problems, such as the need ...View AnswerShow Answer

You have two choices in declaring personal bankruptcy: A consumer proposal or declaration through an assignment in bankruptcy.

Correct AnswerverifiedShow Answer

A variable interest rate is based on fluctuating rates in the banking system, such as the prime rate.

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Membership in credit unions has been

Correct AnswerverifiedShow Answer

You can often obtain medium-priced loans from

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following may indicate potential debt problems?

Correct AnswerverifiedShow Answer

According to consumer affairs experts, one of the nation's main family financial problems is

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

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

Correct AnswerverifiedShow Answer

What is monthly payment for a $20,000 amortized loan to purchase a car payable over 3 years at an annual interest rate of 6%?

Correct AnswerverifiedShow Answer

Inflation increases the purchasing power of money.

Correct AnswerverifiedShow Answer

The most commonly purchased type of credit insurance is

Correct AnswerverifiedShow Answer

For some debtors, bankruptcy has become an acceptable tool of credit management.

Correct AnswerverifiedShow Answer

Consumer credit counseling services are basically concerned with

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A float refers to:

Correct AnswerverifiedShow Answer

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1. Emotional problems, such as the need ...
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