Description: 7.02 Test
1. Which purchase is most suitable for installment credit? (NCCTE.9_12.SH.BF05.PF7.02)
A. Fast food meal
B. Pair of movie tickets
C. Refrigerator
D. Gas for the car
2. Credit applications usually request income information as evidence of a borrower's:
(NCCTE.9_12.SH.BF05.PF7.02)
A. capacity.
B. capital.
C. character.
D. credit.
3. Which is an example of a prime or preferred lender? (NCCTE.9_12.SH.BF05.PF7.02)
A. Gregory obtained a payday loan but the interest rate was very high.
B. Haley went to a loan shark when no one else would give her a loan.
C. Judy obtained a personal loan from the credit union.
D. Katie took jewelry to a pawnbroker to get some cash.
4. Which is an example of a sub-prime or non-preferred lender?
(NCCTE.9_12.SH.BF05.PF7.02)
A. Carla went to a pawnbroker to get money in exchange for her mother's pearl ring.
B. Dean borrowed money from the value of his life insurance policy.
C. The Coleys obtained a home mortgage from the bank to buy their new home.
D. The Dells obtained a loan from a consumer finance company.
5. Jose is nineteen and is trying to establish credit. What should he do?
(NCCTE.9_12.SH.BF05.PF7.02)
A. Borrow a friend's credit card
B. Fill out a college application
C. Get a loan from his parents
D. Get a secured credit card from a financial institution
6. Beth signed a loan agreement and then learned that the lender was a non-preferred
lender. She wants to end the agreement. What should she do?
(NCCTE.9_12.SH.BF05.PF7.02)
A. Check to see if she has the right to rescission of this agreement within three days
B. Look for a lawyer and run a credit check on the lender
C. Make the best of the situation since she has already signed the agreement
D. Wait and see if the lender turns out to be credible
7. As Larry walked across airport terminal, he was stopped by a representative of a credit
card company recruiting people to become cardholders in exchange for the free gift of
two large soft drinks. What should he do? (NCCTE.9_12.SH.BF05.PF7.02)
A. Avoid accepting the offer without thoroughly checking terms, including fine print
B. Find his friends so they can all benefit from the free drinks
C. Leave his personal information so the representatives can contact him later
D. Walk the other way to avoid talking to the representatives
8. Which is a sign of debt problems? (NCCTE.9_12.SH.BF05.PF7.02)
A. Mr. Jenkins is short-tempered because he's concerned about how he will pay the
bills.
B. Mrs. Kline has a $10,000 credit limit and pays her balance in full each month.
C. Ms. Lanning avoids the hassles of check-writing by using checking account drafts.
D. Ms. Martin saves 15% of her income each month.
9. Which is a strategy for getting out of debt? (NCCTE.9_12.SH.BF05.PF7.02)
A. Margie made a list of all her living expenses and amounts to repay debts each
month.
B. Nora spent all of her savings and asked her uncle for a loan.
C. Patrick obtained a cash advance to buy tickets to a concert.
D. Rita tried to open a new credit card account since her others had reached their
limits.
10. Matthew was deeply in debt and decided to file Chapter 7 bankruptcy. What can be
concluded about Matthew? (NCCTE.9_12.SH.BF05.PF7.02)
A. He had to sell some of his personal belongings.
B. He had enough money to pay all his bills.
C. He was able to clear his credit report and start over.
D. He was able to request a free credit report every twelve months.
11. An ADVANTAGE of using credit is the: (NCCTE.9_12.SH.BF05.PF7.02)
A. increase of debt resulting from credit use.
B. payment of interest on the amount borrowed.
C. potential to misuse credit and spend too much.
D. use of goods and services while making payments.
12. Which is MOST suitable use of revolving credit? (NCCTE.9_12.SH.BF05.PF7.02)
A. Buying a new automobile
B. Buying new furniture for a bedroom
C. Paying for electrical power for the past month
D. Shopping for clothes in a retail department store
13. A DISADVANTAGE of using credit is: (NCCTE.9_12.SH.BF05.PF7.02)
A. buying items at a low price on sale.
B. having a source of cash for emergencies.
C. the convenience of paying on the Internet.
D. the payment of interest on the amount borrowed.
14. Creditors typically check a borrower's credit report as evidence of a borrower's:
(NCCTE.9_12.SH.BF05.PF7.02)
A. capacity.
B. capital.
C. character.
D. condition.