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Question 1. Question : (TCO 3) Examples of _____ include automobile and installment loans for purchasing furniture or appliances. a line of credit a credit card loan open-end credit closed-end credit convenience credit Question 2. Question : this being offered as
installment credit. a box of credit. convenience credit. revolving credit. a single lump-sum credit.
(TCO 3) When obtaining open-end credit, you may see
Question 3. Question : (TCO 3) Which one of these agencies can provide a report about your past and present credit activity to a prospective creditor? The Federal Reserve Bank in your district The Audit Bureau of Circulation The Federal Trade Commission A debit bureau A credit bureau Question 4. Question : credit report?
(TCO 3) Which one of these items can be included in your
Race Marital status Sex Nationality
Question 5. Question : bureaus except
(TCO 3) All of the following provide data to credit
the Internal Revenue Service.
Question 6. Question : (TCO 3) One of the five Cs that describes a borrower's attitude toward his or her credit obligations is called
Question 7. Question : (TCO 3) One of the five Cs of lending refers to a borrower's financial ability to meet credit obligations; this is called
Question 8. Question : (TCO 3) When reviewing your credit file, if you find that there is information that is incorrect, then
there are legal remedies available to you.
you have no legal remedies.
credit bureaus are not required to change it.
you can't really do much about it.
don't worry much, because you will still get the credit.
Question 9. Question : an advantage of credit?
(TCO 3) Which one of the selections can be categorized as
The use of credit can lead to court action and bankruptcy.
The use of credit can lead to overspending.
The use of credit can lead to anxiety.
The use of credit ties up the use of future income.
The use of credit allows for the purchase of goods even when funds are low.
Question 10. Question : (TCO 3) Mary Jones has obtained a loan that must be paid over the next 12 months and she will use this money for a vacation. What type of credit is being used?
Installment sales credit
Single lump sum credit
Installment cash credit
(TCO 3) As used in Chapter 7 of the text, float refers to
an interest charged for only a few days.
something one enjoys in a parade.
a home equity loan.
a period when no interest is charged.
a lump-sum loan from a credit union. Question 12. from
(TCO 3) Usually, medium-priced loans can be obtained
parents or family members. commercial banks and credit unions. the Diners Club. finance companies. American Express. Question 13. their debts?
(TCO 3) What is the top reason why consumers default on
Medical expenses Defective goods and services
Excessive use of credit Fraudulent use of credit Consumer fraud Question 14. Question : (TCO 3) The following bankruptcy option allows a debtor with a regular income to extinguish his or her debts from future earnings over time.
Chapter 7 Chapter 11 Chapter 13 Chapter 15
Question 15. Question : (TCO 3) Allison Smith starts the month with a balance of $1,100 on her credit card. On the 10th day of the month, she purchases $200 in clothes with her credit card. On the 15th day of the month, she makes a payment on her credit card of $500. The average daily balance for the month including the new purchase is $883. The average daily balance for the month excluding the new purchase is $750. Allison's interest rate is 1.5% for the month. Allison's bank calculates the finance charge on the credit card by using the adjusted balance method. What would Allison's finance charges be for the month? $7.50 $9.00 $11.25 $13.25 $16.50
Question 16. Question : (TCO 3) Sarah Russell starts the month with a balance of $1,000 on her credit card. On the 10th day of the month, she purchases $200 in clothes with her credit card. On the 15th day of the month she makes a payment on her credit card of $500. The average daily balance for the month including the new purchase is $883. The average daily balance for the month excluding the new purchase is $750. Sarah's interest rate is 1.5% for the month. Sarah's bank calculates the finance charge on the credit card by using the average daily balance, excluding new purchases. What would Sarah's finance charges be for the month? $7.50 $13.25 $18.00 $15.00 $11.25
Question 17. Question : (TCO 3) If Sarah goes out and spends $600 in new clothes for herself, putting it all on her credit card after her husband returns at 4 a.m. the previous morning from a night on the town, this is an example of which of the following? Misunderstanding or lack of communication Keeping up with the Joneses The expectation of instant comfort The use of money to punish Overindulgence of children Question 18. Question : (TCO 3) Steve has three children and has purchased each of them his or her own TV that is placed in his or her respective room. Which reason for indebtedness is this an example of? Misunderstanding or lack of communication Overindulgence of children The expectation of instant comfort Keeping up with the Joneses The use of money to punish Question 19. Question : finance college.
(TCO 3) _____ families rely heaviest on student loans to
Low-income Middle-income High-income Large Small Question 20. Question : (TCO 3) If Tracy Sears borrows $1,250 for 1 year with an APR of 9% with no service fees, what is her total cost of credit?
$125 $112.50 $7.50 $9.38 $0