Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
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1.
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An
advantage to federal student loans is a. | low intrest rates. | b. | that loans can
be deferred while the borrower is still in school. | c. | graduated
payment programs. | d. | all of the above | | |
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2.
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Overdraft protection available to customers with a good credit history provides
for a. | payment of
checks written over the amount of the balance in the account. | b. | electronic funds
transfer at ATM machines. | c. | interest-free checking. | d. | none of the
above | | |
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3.
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A
stop payment order is used to prevent thieves from being able to use a person’s
stolen a. | ATM
card. | c. | checks. | b. | debit card. | d. | traveler’s checks. | | | | |
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4.
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Amy
lost her wallet in which she had her credit card. Her liability for the stolen credit card
is a. | the amount that
the thieves charge. | b. | $50 regardless of when she discovers the
loss. | c. | $50 only if she notifies the bank that issued the credit card
within two business days of discovering the stolen credit card. | d. | none of the
above | | |
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5.
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Usury
is the a. | interest rates
above the legal limit. | c. | legal limit for
interest rates on credit. | b. | annual fee charged for a credit
card. | d. | service fee on
checking accounts. | | | | |
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Completion
Complete each sentence or
statement.
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Complete each of the following statements with the appropriate choice below.
Some choices are not used.
balloon
payment | garnishment | bankruptcy | loan sharking | credit discrimination | truth in
lending | default | usury | | |
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6.
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A
credit arrangement in which people lend money at high, often illegal, rates of interest is
____________________.
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7.
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Requirement in a credit arrangement that the last payment is much larger than the
monthly payment is a ____________________.
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8.
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____________________ requires creditors to give consumers basic information about the
cost of buying on credit.
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9.
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A
person denied credit because they are single and not married is the victim of
____________________.
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10.
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A
consumer who is unable to pay a debt is in ____________________.
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Matching
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Match each item with the correct statement below. Some items will not be
used. a. | acceleration
clause | e. | debtors | b. | annual percentage rate | f. | interest | c. | collateral | g. | secured
credit | d. | credit sales | h. | unsecured credit | | | | |
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11.
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interest rate paid per year on borrowed money
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12.
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credit term that requires entire balance to be paid in full if a payment is missed or
late
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13.
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credit based on a promise by the debtors to repay and to give up their property if the
loan is not repaid
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14.
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the
cost of borrowing money
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15.
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property put up by the debtor as a security for money borrowed
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Short Answer
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16.
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What
is the total credit limit that John Q. Consumer is able to use?
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17.
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How
much credit is available now for John Q. Consumer to use? Why?
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18.
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How
much money does John Q. Consumer have to pay to avoid all finance charges? What is his minimum
payment?
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