FP 120 Week 2 Quiz to be taken in class

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FP 120 Week 2 Quiz to be taken in class
FP 120 Week 2 Quiz to be taken in class
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Year: 2015
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FP 120 Week 2 Quiz to be taken in class

Instructions

Complete the Week 2 Quiz.

Submit your responses in a Microsoft® Word® document to the Assignment Files tab

 

Week 2 Quiz

 

  1. Which of the following is an example of open-end credit?

 

  1. An automobile loan

  2. A department store credit card

  3. A mortgage loan

  4. Single lump-sum credit

 

  1. Which of the following is an example of closed-end credit?

 

  1. A mortgage loan

  2. Overdraft protection

  3. A bank line of credit

  4. All of the above

 

  1. Which of the following is NOT one of the Five C’s of credit?

 

  1. Capacity

  2. Collateral

  3. Conditions

  4. Credit

 

  1. Which of the following is a characteristic of this Five C: Capacity?

 

  1. Credit payment history

  2. Total net worth

  3. Present debt

  4. None of the above

 

  1. Which of the following is NOT a credit bureau?

 

  1. Equifax

  2. Experian

  3. Fair Isaac Corporation (FICO)

  4. TransUnion

 

  1. Which of the following is the most effective way to improve your credit score?

 

  1. Pay your bills on time.

  2. Never exceed your credit limit.

  3. Reduce your credit utilization rate.

  4. Close your credit card accounts as soon as you pay them off.

 

  1. Experts suggest that the debt payments-to-income ratio should be a maximum of

 

  1. 0%

  2. 10%

  3. 20%

  4. 30%

 

  1. When calculating the debt-to-equity ratio, the following is NOT included

 

  1. Credit card balances

  2. Open-end credit

  3. Auto loan balances

  4. Mortgage balances

 

  1. Rachel has a net monthly income of $2,500. She has a monthly auto payment of $275, a student loan payment of $150, and a minimum credit card payment of $50. What is her debt-payments-to-income ratio?

 

  1. 8%

  2. 13%

  3. 19%

  4. 22%

 

  1. If you can prove a creditor has discriminated against you for any reason prohibited by this Act, you can sue for actual damages plus punitive damages, up to $10,000.

 

  1. Fair Credit Billing Act

  2. Truth in Lending Act

  3. Equal Credit Opportunity Act

  4. Credit Card Accountability Responsibility and Disclosure Act

 

  1. Which of the following is NOT true about the Fair Credit Reporting Act?

 

  1. It regulates the use of credit reports.

  2. It requires deletion of out-of-date information.

  3. It places limits on who can obtain our report.

  4. It gives borrowers the right to know why they are denied credit.

 

  1. Which of the following is often the first sign of a stolen identity?

 

  1. You receive bills for a credit card you never opened.

  2. You see charges to your account for items you purchased.

  3. You receive a duplicate credit card from your credit card company.

  4. All of these are typical signs of a stolen identity.

 

  1. If you think your identity has been stolen, which of the following actions does the Federal Trade Commission recommend you take immediately?

 

  1. Call 911.

  2. Contact your local bank.

  3. File a police report.

  4. All of these steps should be taken immediately.

 

  1. When you have serious debt problems, where is the best place to seek help?

 

  1. From a debt consolidation company

  2. From an independent consumer credit counseling agency, such as the National Foundation for Credit Counseling

  3. From a credit deferral service

  4. From a private loan organization, such as a bank or credit union

 

  1. Personal bankruptcy can be filed under which section(s) of the U.S. bankruptcy code?

 

  1. Chapter 7

  2. Chapter 11

  3. Chapter 13

  4. Chapters 7 and 13

 

  1. All of the following are signs of financial trouble except:

 

  1. You use savings to pay for necessities such as food and utilities.

  2. You exceed the credit limits on your credit cards.

  3. You pay your credit card bills in full each period.

  4. The total balance on your credit cards increases each month.

 

  1. Which of the following is NOT a step in correcting an error on your credit report?

  1. Contact credit reporting bureaus.

  2. Contact the creditor.

  3. Allow 30 days for correction.

  4. Stop all payment on the disputed account.

 

  1. Which of the following are examples of what the Fair Credit Billing Act does?

 

  1. Corrects billing errors

  2. Allows creditors 30 days to investigate a dispute

  3. Requires deletion of out-of-date information

  4. All of the above

  1. Which of the following are examples of what the Fair Credit Billing Act does?

  1. Corrects billing errors

  2. Allows creditors 30 days to investigate a dispute

  3. Requires deletion of out-of-date information

  4. All of the above

 

  1. A direct loan for personal purposes, home improvements, or vacation expenses is called

  1. A credit card

  2. A revolving check credit

  3. Interest

  4. An installment cash credit