Personal Finance 13th Edition by E. Thomas Garman – Test Bank

Personal Finance 13th Edition by E. Thomas Garman – Test Bank

True / False

1. Credit is a term used to describe any situation in which goods, services, or money is received in exchange for a promise to repay at a future date.

a.

True

b.

False

ANSWER:

True

POINTS:

1

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 1:17 AM

DATE MODIFIED:

9/27/2017 1:18 AM

2. The most commonly used forms of credit by consumers are loans and credit cards.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 1:21 AM

DATE MODIFIED:

9/27/2017 1:21 AM

3. Loans generally require equal payments over a set period of time.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 1:22 AM

DATE MODIFIED:

9/27/2017 1:22 AM

4. Convenience use of credit is common.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 1:23 AM

DATE MODIFIED:

9/27/2017 1:24 AM

5. Credit cards allow repeated use of credit as long as you make the minimum monthly payment.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 1:25 AM

DATE MODIFIED:

9/27/2017 1:26 AM

6. Credit cards allow repeated use of credit as long as equal monthly payments are maintained over a set period of time.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1 the payments will vary according to the balance of the debt on the account

DATE CREATED:

9/27/2017 1:27 AM

DATE MODIFIED:

9/27/2017 1:27 AM

7. Credit cannot be used to own expensive products sooner.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1 this is why most people use credit

DATE CREATED:

9/27/2017 1:29 AM

DATE MODIFIED:

9/27/2017 1:29 AM

8. Credit card blocking is the process whereby the merchant may notify the credit card issuer to put a hold on your account for the anticipated total amount of the charge.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 1:30 AM

DATE MODIFIED:

9/27/2017 1:31 AM

9. Advantages of credit use include increased protection against rip-offs and frauds.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 1:32 AM

DATE MODIFIED:

9/27/2017 1:32 AM

10. People can use credit to take advantage of “free” credit.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 1:34 AM

DATE MODIFIED:

9/27/2017 1:34 AM

11. Taking on excessive debts early in life may compromise your goal of being financially successful.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 1:35 AM

DATE MODIFIED:

9/27/2017 1:35 AM

12. Convenience use of a credit card is justified only if the card balance is paid in full by the end of the year.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1 convenience usage should be paid off monthly.

DATE CREATED:

9/27/2017 1:37 AM

DATE MODIFIED:

9/27/2017 1:38 AM

13. Credit use increases future buying power.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1 it decreases future buying power.

DATE CREATED:

9/27/2017 1:46 AM

DATE MODIFIED:

9/27/2017 1:46 AM

14. A principal problem with using credit is the opportunity cost of being less able to save and invest.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 1:47 AM

DATE MODIFIED:

9/27/2017 1:47 AM

15. Interest is the charge for the privilege of borrowing money.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 1:48 AM

DATE MODIFIED:

9/27/2017 1:49 AM

16. The lower the annual percentage rate of interest (APR), the higher the cost of credit.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1 the lower the APR the lower the cost of credit.

DATE CREATED:

9/27/2017 1:50 AM

DATE MODIFIED:

9/27/2017 1:50 AM

17. The APR can be used to compare credit contracts with different time periods, finance charges, repayment schedules, and amounts borrowed.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

False Moderate

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 1:52 AM

DATE MODIFIED:

9/27/2017 1:52 AM

18. The Truth in Lending Act requires lenders to state the finance charge both in dollars and as an annual percentage rate (APR).

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_1 – Legal

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 1:55 AM

DATE MODIFIED:

9/27/2017 1:55 AM

19. The APR expresses the cost of credit on a monthly basis as a percentage rate.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1 the APR expresses the cost of credit on a yearly basis as a percentage rate.

DATE CREATED:

9/27/2017 1:57 AM

DATE MODIFIED:

9/27/2017 1:57 AM

20. When comparing loans from two or more sources you want to focus on the lowest monthly payment.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1 you should focus on the lowest APR.

DATE CREATED:

9/27/2017 1:59 AM

DATE MODIFIED:

9/27/2017 1:59 AM

21. The additional dollar cost for using credit is referred to as the APR.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

6.1 the dollar cost of credit is the finance charge.

DATE CREATED:

9/27/2017 2:01 AM

DATE MODIFIED:

9/27/2017 2:01 AM

22. The finance charge on a loan is simply the interest charged by the lender.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

List some advantages and disadvantages of using credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1 the finance charge includes all required charges including the interest

DATE CREATED:

9/27/2017 2:03 AM

DATE MODIFIED:

9/27/2017 2:04 AM

23. Your debt limit is the overall maximum you believe you should owe based on your ability to meet the repayment obligations.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Establish your own debt limit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.1

DATE CREATED:

9/27/2017 2:06 AM

DATE MODIFIED:

9/27/2017 2:06 AM

24. The willingness of a lender to grant you credit is a good indicator that you can afford the payments required.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Establish your own debt limit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.2 you should set your own debt limits.

DATE CREATED:

9/27/2017 2:08 AM

DATE MODIFIED:

9/27/2017 2:08 AM

25. A consumer that has nonmortgage debt repayments of 10 percent or more of annual take-home pay is seriously in debt.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Establish your own debt limit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.2 a debt payments-to-disposable income ratio of 19 percent or more indicates being seriously overindebted.

DATE CREATED:

9/27/2017 2:10 AM

DATE MODIFIED:

9/27/2017 2:10 AM

26. The debt-to-income method of determining your debt limit compares nonmortgage debts to take-home pay.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Establish your own debt limit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.2 this is the debt payment-to-disposable income method.

DATE CREATED:

9/27/2017 2:13 AM

DATE MODIFIED:

9/27/2017 2:14 AM

27. A debt-to-equity method provides a quick idea of one’s financial solvency. The larger the ratio, the riskier the likelihood of repayment.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Establish your own debt limit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.2

DATE CREATED:

9/27/2017 2:16 AM

DATE MODIFIED:

9/27/2017 2:16 AM

28. A debt-to-equity method provides a quick idea of one’s financial solvency. The larger the ratio, the riskier the likelihood of repayment. A ratio in excess of 0.25 is considered high.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Establish your own debt limit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

6.2 ratios in excess of 33 percent are considered high.

DATE CREATED:

9/27/2017 2:18 AM

DATE MODIFIED:

9/27/2017 2:18 AM

29. If your total debts exceed 33 percent of your net worth (equity) you are seriously overindebted.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Establish your own debt limit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.2

DATE CREATED:

9/27/2017 2:20 AM

DATE MODIFIED:

9/27/2017 2:21 AM

30. The value of an asset less the amount owed on a debt used to buy the asset is your stake in the asset.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Establish your own debt limit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.2 this excess is referred to as your “equity” in the asset.

DATE CREATED:

9/27/2017 2:23 AM

DATE MODIFIED:

9/27/2017 2:23 AM

31. If you are unable to get completely out of debt every five years (except for a mortgage loan), you probably lean on debt too heavily.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Establish your own debt limit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.2 if you are unable to get completely out of debt every four years, you probably lean on debt too heavily.

DATE CREATED:

9/27/2017 2:40 AM

DATE MODIFIED:

9/27/2017 2:40 AM

32. Under the continuous-debt method of determining whether you are carrying too much debt you should be able to get out of all debt except mortgage debt completely within four years.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Establish your own debt limit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.2

DATE CREATED:

9/27/2017 2:42 AM

DATE MODIFIED:

9/27/2017 2:42 AM

33. It is a smart move to consolidate all your student loans into one loan once you graduate from college.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Establish your own debt limit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.2

DATE CREATED:

9/27/2017 2:43 AM

DATE MODIFIED:

9/27/2017 2:44 AM

34. Dual-earner households should consider lower debt limits as a percentage of income.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Establish your own debt limit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.2

DATE CREATED:

9/27/2017 2:51 AM

DATE MODIFIED:

9/27/2017 2:52 AM

35. According to a recent study, approximately 5 percent of those applying for credit are turned down.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

6.2 about 15 percent of applicants are denied credit.

DATE CREATED:

9/27/2017 2:53 AM

DATE MODIFIED:

9/27/2017 2:53 AM

36. A credit applicant is required by federal regulations to disclose all of his or her sources of income.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_1 – Legal

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.3 you need not disclose all your sources of income on a credit application although not doing so may increase the likelihood that credit will be denied.

DATE CREATED:

9/27/2017 2:55 AM

DATE MODIFIED:

9/27/2017 2:55 AM

37. The Equal Credit Opportunity Act prohibits the rejection of credit due to a poor credit history.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_1 – Legal

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

6.3 this reason for rejection is allowed.

DATE CREATED:

9/27/2017 2:57 AM

DATE MODIFIED:

9/27/2017 2:57 AM

38. Lenders are not allowed to discriminate among applicants.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.3 lenders cannot “unfairly” discriminate but can legally use income, other existing debts, past payment history and other factors when deciding whether to grant credit.

DATE CREATED:

9/27/2017 2:58 AM

DATE MODIFIED:

9/27/2017 2:59 AM

39. Lenders pay a fee for each credit report requested.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.3

DATE CREATED:

9/27/2017 3:01 AM

DATE MODIFIED:

9/27/2017 3:01 AM

40. Credit scores can dictate whether you will be granted credit and at what interest rates.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.3

DATE CREATED:

9/27/2017 3:02 AM

DATE MODIFIED:

9/27/2017 3:03 AM

41. Identity theft is the most commonly perpetrated form of consumer fraud in the U.S.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

6.2

DATE CREATED:

9/27/2017 3:07 AM

DATE MODIFIED:

9/27/2017 3:07 AM

42. The three digit code on the back of a credit card that helps protect against unauthorized use of the card is called its card verification value

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

6.3

DATE CREATED:

9/27/2017 3:10 AM

DATE MODIFIED:

9/27/2017 3:11 AM

43. You can instruct a credit bureau to not release your credit report to anyone without your permission by requesting a credit card block.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – BB_2 – Industry

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.2 such a request is for a “credit freeze.”

DATE CREATED:

9/27/2017 3:14 AM

DATE MODIFIED:

9/27/2017 3:14 AM

44. If your credit card is lost or stolen or if you ever suspect fraudulent use of an account, you should contact each of the three national credit bureaus and have a “high-risk account holder” designation put on your file.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.2 this request is for a “fraud alert.”

DATE CREATED:

9/27/2017 3:18 AM

DATE MODIFIED:

9/27/2017 3:20 AM

45. Credit scoring systems tend to ignore the degree to which you owe a high percentage of the available credit limits on your credit cards.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.3 Credit scoring systems do pay attention to this information called the utilization ratio.

DATE CREATED:

9/27/2017 3:23 AM

DATE MODIFIED:

9/27/2017 3:28 AM

46. Although your credit file at each of the three major credit bureaus may differ, your credit scores will be the same.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.3 since the credit file information can differ so can your credit scores.

DATE CREATED:

9/27/2017 3:29 AM

DATE MODIFIED:

9/27/2017 3:30 AM

47. The information about you contained in credit bureau files is one of the most important aspects of your financial life.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.3

DATE CREATED:

9/27/2017 3:31 AM

DATE MODIFIED:

9/27/2017 3:32 AM

48. The actual decision to grant credit is made by a credit bureau.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.3 the lender makes the decision.

DATE CREATED:

9/27/2017 3:33 AM

DATE MODIFIED:

9/27/2017 3:33 AM

49. Closing credit card accounts will increase your credit score.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.3 closing accounts lowers your total available credit without lowering your level of debt and the resulting higher debt-to-total available debt percentage may lower your score.

DATE CREATED:

9/27/2017 3:35 AM

DATE MODIFIED:

9/27/2017 3:35 AM

50. Closing unused credit card accounts that have been open for a long time will likely not improve your credit score.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Obtain credit and build a good credit

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

6.3

DATE CREATED:

9/27/2017 3:36 AM

DATE MODIFIED:

9/27/2017 3:37 AM