Chapters 5-8 Personal Finance
A limited warranty covers all aspects of the product and does not require the buyer to incur any of the costs for shipping and repairs.
False
A regular savings account usually offers a higher rate of return to savers than other savings plans.
False
In a closed-end credit, loans are made on a continuous basis and you make at least partial payments.
False
Inflation increases the purchasing power of money.
False
Open dating information provides consumers with information about online dating.
False
Service contracts are usually included in the cost of appliances and other high priced items.
False
The Consumer Credit Counseling Service will refinance all of your existing debt.
False
The Rule of 78's formula dictates that you pay less interest at the beginning of a loan.
False
The least expensive loans are available from finance companies and retailers.
False
The more frequent the compounding, the less a person will earn on a savings account.
False
Examples of closed-end credit:
Mortgage loans, automobile loans, and installment loans for purchasing furniture or appliances.
Examples of open-end credit:
Overdraft protection, credit cards, and home equity loans.
A "free" checking account with a minimum balance of $500 has an opportunity cost of lost interest.
True
A 32oz. package selling for $1.60 would have a unit price of 5 cents an ounce.
True
A certificate of deposit usually has limited liquidity.
True
A checking account would be considered more liquid than most other bank accounts.
True
A class action suit allows many people with the same complaint to take action as a group.
True
A debit card takes money from your account at the moment you buy goods or services.
True
An asset management account combines several financial services for a single fee.
True
Chapter 7 bankruptcy is also known as straight bankruptcy.
True
If you want to take advantage of the interest-free period on your credit card, you must pay your bill in full every month.
True
In addition to the Consumer Credit Counseling Service, universities, credit unions, military bases, and sate and federal housing authorities sometimes provide credit counseling services.
True
Parents or family members are often the source of the least expensive loans.
True
The Consumer Credit Counseling Service counseling is usually free.
True
The Federal Deposit Insurance Corporation provides deposit insurance for your money in a bank.
True
The major criticism of service contracts is high costs and a low chance of need.
True
The money market fund offered by investment companies is a relatively liquid financial service.
True
When interest rates are rising, a person would be best served by short-term saving instruments.
True
You can often obtain medium-priced loans from commercial banks and credit unions.
True
If you have declared personal bankruptcy, that fact may be reported to credit bureaus for how many years?
10 years
Most of the information in your credit file (except bankruptcy) may be reported for how many years?
7 years
An implied warranty is usually in written form.
False
Buying on credit is almost always cheaper than paying cash.
False
Cooperative action is the settlement of a difference by a third party whose decision is legally binding.
False
Credit unions frequently offer higher loan rates than other financial institutions.
False
Higher returns on savings will usually result in greater liquidity.
False
If you declare a Chapter 7 bankruptcy, you do not have to pay alimony, child support, or educational loans.
False
With an open-end credit, you pay back one-time loans in a specified period of time in equal amounts.
False
You may be denied credit because you receive Social Security to public assistance. No, but you may not have enough income to qualify.
False
A government agency designed to provide consumer information and assist with consumer complaints is the Federal Trade Commission.
True
A rate of return is the percentage increase in the value of your account or investment from earned interest.
True
A restrictive endorsement will usually include the words "for deposit only."
True
A social factor that would influence a consumers buying decision would be the hobbies and interests they have.
True
After receiving a phone call from a debt collector, they must send you a written notice within 5 days.
True
Compounding refers to interest gained on your account or investment's previously earned interest.
True
Consumer credit is based on trust in people's ability and willingness to pay bills when due.
True
For some debtors, bankruptcy has become an acceptable tool of credit management.
True
If you default on your car loan, no advance notice is required before repossession.
True
If you want to reduce you borrowing costs, you may need to accept conditions that lower the risk for your lender.
True
One way to gather information about a product is to use an independent testing organization like Consumers Union.
True
Several federal government agencies publish materials to assist consumers with buying decisions and financial planning.
True
The fairest method of calculating interest is the average daily balance method.
True
The finance charge is the total dollar amount you pay to use credit.
True
The first phase in the buying process involves information gathering.
True
The process of resolving consumer complaints with the use of a third party that suggests a solution through mediation and negotiation is mediation.
True
Unit pricing uses a standard unit of measurement to compare prices of packages of different sizes.
True
