Chapter 6 Quiz
Brian Porter's net worth is $120,000, excluding his home. His liabilities of $54,000 include all of his credit card balances and the balance due on his auto loan and home improvement loan. His townhouse has a market value of $220,000 and he owes $190,000 to his mortgage company. What is Brian's debt-to-equity ratio?
0.45
The baby boom generation currently represents about 30% of the population but holds nearly ____ % of the outstanding debt.
60
Which one of the following would not be a good use of a home equity loan?
Buying a new boat
Charles Rickman is applying for a loan from the bank. The bank has determined that he has never been late making payments on past loans. Which of the 5 Cs of credit is the bank looking at?
Character
What are the 5 C's of credit:
Character, Capacity, Capital, Collateral, Conditions
Amy Farmer is getting a loan to buy a used car. The bank wants to know the trade-in value of the car she is purchasing. Which of the 5 Cs of credit is the bank examining?
Collateral
If you think you have been discriminated against by consumer reporting agencies or creditors, you should file a complaint with which government agency?
Consumer Financial Protection Bureau
Which federal consumer credit law prohibits credit discrimination based on sex and marital status?
Equal Credit Opportunity Act
Which federal consumer credit law requires creditors to inform applicants of acceptance or rejection of their credit application within 30 days of receiving a completed application?
Equal Credit Opportunity Act
Which federal consumer credit law allows consumers to withhold payment for faulty or defective goods or services when purchased with a credit card?
Fair Credit Billing Act
Which federal consumer credit law requires credit reporting agencies to send the consumer's version of a disputed item to certain businesses or creditors?
Fair Credit Reporting Act
Which federal law regulates the use of credit reports, requires the deletion of obsolete information, and gives consumers access to their file?
Fair Credit Reporting Act of 1971
What should you do if your identity is stolen?
File a police report.
In addition to department stores, where else is a good place to obtain your first credit card?
Gasoline companies
Jennifer Gardner purchases a sofa, love seat and reclining chair for her family room. She made a down payment and will make payments of $65 per month for the next twenty-four months. What type of credit did Jennifer use?
Installment sales credit
Which of the following is not true of mobile commerce?
Little interest in this concept has been shown by retailers and finance companies.
Karen Price is 55 years old, divorced, and has worked at her current job for five years. She is interested in looking at her credit report. Which of the following pieces of information should she find in this report?
The outstanding balance on the Visa card she has today
Which of the following is not a valid reason for using credit?
To pay for everyday living expenses
Lester McCann is thinking about getting a loan for a new car. He knows that when he goes shopping for a loan that all of the banks must report the annual percentage rate as well as all other terms and conditions of the loan. This will allow him to easily compare loans from different banks. Which consumer protection law requires full disclosure on all loans?
Truth in Lending Act
If your credit application is denied, you:
are entitled to know the specific reason you were denied credit.
If you think that your bill is wrong, you should first:
call the creditor to discuss the error.
Mortgage loans, automobile loans, and installment loans for purchasing furniture or appliances are examples of:
closed-end credit
In determining your credit capacity, you first provide for basic necessities within your budget, such as:
mortgage or rent
An example of open-end credit is:
the use of a bank credit card to make a purchase
If you have incorrect information in your credit file:
there are legal remedies available to you.