AnswersFinancial MathCredit and Types of Loans

Practice Test Answers

15 verified answers
2
Free Preview

What is buying power?

A
the capacity to negotiate and secure favorable prices on goods and services
B
the influence of a company to set and control prices within the market
C
the ability to make purchases informed by one's financial capacity and credit standing
D
the ability to make investments within the stock market based on available financial resources
3

Which information is considered a public record that can affect your credit score?

A
voting history
B
employment records
C
educational background
D
tax liens
7

Which type of loan requires collateral?

A
revolving loan
B
unsecured loan
C
secured loan
D
installment loan
13

How would the weighted average interest rate change if the interest rate for Option 1 Loan Part B increases to 5.0% ?

A
Increase to 4 point 4 percent
B
Increase to 4 point 1 percent
C
Stay the same at 3 point 9 percent
D
Decrease to 5 point 0 percent
14

What is a potential financial advantage of Antonio choosing to pay with cash?

A
offers flexibility in budgeting monthly expenses
B
improves his credit rating through regular payments
C
reduces the total cost by avoiding interest
D
allows him to resell equipment without any loan obligations
15

After the initial lump sum payment, how does the remaining balance decrease compared to making fixed payments of $⁢150 per month?

A
It decreases at the same rate.
B
It decreases at a slower rate.
C
It initially increases before decreasing.
D
It decreases at a faster rate.
16

Athena is a graphic designer who travels internationally for work about four times a year. She frequently dines out, both at home and during her travels. Athena also enjoys online shopping and often makes significant purchases at department stores. Additionally, she carries a balance on her credit card occasionally and is looking for a card that offers some flexibility in payments. Athena is also mindful of annual fees but is willing to pay if the benefits outweigh the cost. Given Athena's financial profile and lifestyle, which credit card would be the most suitable for her needs?

A
The Traveler's Advantage Card best matches Athena's needs, due to its travel and dining rewards, despite its annual fee and high interest on carried balances.
B
None of the above cards perfectly match Athena's needs; she might benefit from having a combination of these cards.
C
The Shopper's Reward Bonanza Card best matches Athena's needs, considering her frequent department store purchases and special financing offers, and despite the need to enroll in bonus categories.
D
The Everyday Savings Card best matches Athena's needs, for its simple cash back structure and no annual fee, although it lacks significant travel benefits.

Did you find these answers helpful?