Unit Test — Unit test Answers

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1
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Interest paid on a loan is calculated as a percentage of the

A
principal.
B
amount owed.
C
compounded principal.
D
collateral.
3

Why do some lenders require borrowers to secure credit?

A
to prevent defaults
B
to guarantee full repayment
C
to avoid any losses
D
to reduce risk
4

Government regulations on credit aim to

A
ensure lenders are repaid.
B
help borrowers pay on time.
C
support those borrowing credit.
D
educate lenders about consumers.
5

Before applying for a credit card, Jacob examines his credit report. Which explains why Jacob might examine his credit report?

t
to determine which company has the best credit card features
t
to determine if he has a history of good credit
t
to determine if he needs a credit card
t
to determine his credit limit
7

Tyler is using a credit card to purchase a television. Which of the following should Tyler expect? Check all that apply.

A
to have the full amount available in his bank account right away
B
to receive a bill at a later date
C
to be able to pay for it over time
D
to write a check
E
to pay interest if he does not pay in full by a certain date
8

An example of secured credit is a

A
payday loan.
B
credit card.
C
mortgage.
D
medical bill.
10

Ted has $55.00 in his pocket. Which purchase will he be able to pay for with cash?

A
two books for $29.95 each
B
headphones for $29.99 and a portable speaker set for $30.95
C
an MP3 player for $35.99 and a $20.00 gift card for downloading music
D
three books for $16.99 each
12

APR on a loan may be adjusted based on a borrower’s

A
offered collateral.
B
credit history.
C
loan fees.
D
scheduled repayments.
14

Shondra is thinking of making payments for her laptop by setting up automatic withdrawals with the store. What must Shondra consider before she decides to pay with automatic withdrawals?

A
Shondra should be sure she will remember to call the store each month to make the payment.
B
Shondra should check her credit history to be sure she has a good credit score.
C
Shondra should be sure she will have enough in her account to be able to make the monthly payments.
D
Shondra should consult with a credit counseling service.
15

Omar is having trouble paying his rent and making minimum payments on his student loan and credit cards. What should Omar consider doing to improve his situation?

A
Omar should apply for a personal loan.
B
Omar should get budgeting advice from a consumer credit counselor.
C
Omar should apply for another credit card to buy food with.
D
Omar should make less than the minimum payments each month.
16

It is important to shop around for credit because banks and financial institutions

A
have varying credit histories.
B
charge different fees.
C
follow different laws.
D
have varying discriminatory policies.
18

good credita bank accounttax returns

A
good credit
B
a bank account
C
tax returns
19

Kendrick is planning to buy a house. Which explains why he should establish a positive credit history before buying the house?

A
He will get the house for a lower price.
B
It will be easier for him to get a loan to buy the house.
C
He will be able to get a higher interest rate when buying the house.
D
He will be able to find a house he likes more quickly.
20

How do government regulators protect consumers?

A
by investigating complaints made by lenders
B
by using borrower information responsibly
C
by disclosing accurate credit terms
D
by ensuring lenders comply with the law

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Unit Test — Unit test Answers — TX-Personal…