Question 1

There are very few valid reasons for using credit.

Accepted Answer

A) True 
 B)False

Question 2

A valuable asset pledged to assure loan payments and subject to seizure upon default is called

Accepted Answer

A)   capacity.
B)   character.
C)   capital.
D)   collateral.
E)   conditions.F) C) and E)
G) A) and E)

Question 3

Kathy purchased a $2,000 digital TV from Young's Appliances. She will make 12 equal payments over the next year to pay for it. She is using:

Accepted Answer

A)   an installment loan
B)   open-end credit
C)   revolving check credit
D)   a line of credit
E)   none of the aboveF) C) and E)
G) D) and E)

Question 4

The borrower's financial ability to meet credit obligations is called

Accepted Answer

A)   capacity.
B)   character.
C)   capital.
D)   collateral.
E)   conditions.F) B) and C)
G) C) and E)

Question 5

Provincial legislation regarding consumer reporting agencies regulate the type of information that can appear in a credit report and protects the consumer's right not to suffer from false information.

Accepted Answer

A) True 
 B)False

Question 6

If your identity is stolen you should

Accepted Answer

A)   Contact the fraud departments of each of the two credit bureaus.
B)   Contact the creditors for any accounts that have been tampered with or opened fraudulently.
C)   File a police report
D)   Keep a copy of the police report
E)   Take all of the actions indicatedF) A) and D)
G) D) and E)

Question 7

As a result of the financials crisis in late med to late 2000 decade, new regulations were brought into effect to protect Canadian credit card users. Briefly list and describe these.

Accepted Answer

Originally announced in September, 2009,...

Question 8

The use of credit indicates personal and financial instability.

Accepted Answer

A) True 
 B)False

Question 9

Department stores and gasoline companies are good places to obtain your first credit card.

Accepted Answer

A) True 
 B)False

Question 10

Consumers have three alternatives in financing current purchases, including drawing up on savings, use their present earnings, or borrow against their expected future income

Accepted Answer

A) True 
 B)False

Question 11

Cobranding has become increasingly unpopular since General Motors launched its credit card in 1992.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not an example of revolving credit?

Accepted Answer

A)   overdraft protection
B)   charge cards
C)   mortgage
D)   line of credit.
E)   bank card creditF) B) and D)
G) C) and E)

Question 13

When you cosign a loan, you are being asked to guarantee this debt.

Accepted Answer

A) True 
 B)False

Question 14

The use of credit can provide up to a 45 day "float."

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is the worst rating to have on your credit report?

Accepted Answer

A)   L0
B)   L10
C)   R0
D)   R1
E)   R9F) A) and E)
G) A) and D)

Question 16

Which of the following is not an example of revolving credit?

Accepted Answer

A)   a line of credit.
B)   a credit card loan.
C)   overdraft protection.
D)   charge cards.
E)   automobile loans.F) All of the above
G) C) and D)

Question 17

You should sign your new credit cards as soon as they arrive.

Accepted Answer

A) True 
 B)False

Question 18

College students are not a prime target for credit card issuers.

Accepted Answer

A) True 
 B)False

Question 19

Experts suggest that you spend no more than 20 percent of your net income on credit payments. (However, 15 percent is much better.)

Accepted Answer

A) True 
 B)False

Question 20

A credit arrangement that has no extra costs and no specific repayment plan is called

Accepted Answer

A)   installment sales credit.
B)   incidental credit.
C)   line of credit.
D)   single lump-sum credit.
E)   revolving check credit.F) A) and C)
G) A) and D)

Exam 5: Introduction to Consumer Credit

Consumers have three alternatives in financing current purchases, including drawing up on savings, use their present earnings, or borrow against their expected future income

Correct AnswerverifiedShow Answer

You should sign your new credit cards as soon as they arrive.

Correct AnswerverifiedShow Answer

Kathy purchased a $2,000 digital TV from Young's Appliances. She will make 12 equal payments over the next year to pay for it. She is using:

Correct AnswerverifiedShow Answer

Experts suggest that you spend no more than 20 percent of your net income on credit payments. (However, 15 percent is much better.)

Correct AnswerverifiedShow Answer

Provincial legislation regarding consumer reporting agencies regulate the type of information that can appear in a credit report and protects the consumer's right not to suffer from false information.

Correct AnswerverifiedShow Answer

The use of credit indicates personal and financial instability.

Correct AnswerverifiedShow Answer

Cobranding has become increasingly unpopular since General Motors launched its credit card in 1992.

Correct AnswerverifiedShow Answer

If your identity is stolen you should

Correct AnswerverifiedShow Answer

A valuable asset pledged to assure loan payments and subject to seizure upon default is called

Correct AnswerverifiedShow Answer

The borrower's financial ability to meet credit obligations is called

Correct AnswerverifiedShow Answer

When you cosign a loan, you are being asked to guarantee this debt.

Correct AnswerverifiedShow Answer

There are very few valid reasons for using credit.

Correct AnswerverifiedShow Answer

Which of the following is not an example of revolving credit?

Correct AnswerverifiedShow Answer

As a result of the financials crisis in late med to late 2000 decade, new regulations were brought into effect to protect Canadian credit card users. Briefly list and describe these.

Correct AnswerverifiedOriginally announced in September, 2009,...View AnswerShow Answer

Which of the following is the worst rating to have on your credit report?

Correct AnswerverifiedShow Answer

College students are not a prime target for credit card issuers.

Correct AnswerverifiedShow Answer

Which of the following is not an example of revolving credit?

Correct AnswerverifiedShow Answer

A credit arrangement that has no extra costs and no specific repayment plan is called

Correct AnswerverifiedShow Answer

The use of credit can provide up to a 45 day "float."

Correct AnswerverifiedShow Answer

Department stores and gasoline companies are good places to obtain your first credit card.

Correct AnswerverifiedShow Answer

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Originally announced in September, 2009,...
View Answer

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