Business of Financial Contracts Test

Which of the following financial contracts represents a relationship between an employee and his or her employer? A checking account; A payroll advance; A loan; A credit card

A payroll advance

Which of the following is NOT an example of a financial institution? A credit union; An investment banking center; A realtor; A mortgage company

A realtor

Which of the following finance charge calculation methods is the least advantageous to the creditor? Double balance; Adjusted balance; Average daily balance; Previous balance

Adjusted Balance

Creditors make the most money off which of the following types of tiered APR? Purchases; Installments; Balance Transfers; Cash Advances

Cash Advances

Janet has an introductory APR for the first six months. After that her rate increases to a variable 13.99%. Janet purchased the card in January, how would you define her rate in October? Variable; Fixed; Mixed; Elastic

Variable

Which of the following is an open line of credit to spend on consumer goods? A loan; A checking account; A security; A credit card

A credit card

Which of the following is a closed line of credit to spend on consumer goods or intangible goods? A loan; A checking account; A security; A credit card

A loan

Which of the following finance charge calculation methods is the least advantageous to the debtor? Double balance; Adjusted balance; Average daily balance; Previous balance

Double Balance

Annual Percentage Rate calculates which of the following? Debt-to-income ratio; Interest rate; Periodic rate; Debtor Income

Interest Rate

Which of the following financial contracts involves risk? Checking accounts; Payroll advances; Investment banking; Savings accounts

Investment banking