BUSN 380 DEVRY WEEK 3 QUIZ LATEST

BUSN 380 DEVRY WEEK 3 QUIZ LATEST
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BUSN 380 DeVry Week 3 Quiz Latest
BUSN380
BUSN 380 DeVry Week 3 Quiz Latest
1. Question : (TCO 3) Examples of _____ include automobile and installment loans for purchasing
furniture or appliances.
a line of credit
a credit card loan
open-end credit
closed-end credit
convenience credit
Question 2. Question : (TCO 3) The maximum percentage of your net income that should be spent on
credit purchases is recommended to be _____.
10%
20%
30%
40%
50%
Question 3. Question : (TCO 3) One of the concerns and risks associated with cosigning is that
you are not being asked to guarantee the debt.
it is not your legal responsibility to pay the debt.
you’ll have to pay up to the full amount of the debt if the borrower does not pay.
the creditor must first try to collect from the borrower.
the creditor cannot garnish your wages.
Question 4. Question : (TCO 3) Dividing monthly debt payments (not including house payments) by net
monthly income will allow you to calculate your _____.

net-worth-to-debt ratio
debt-payments-to-income ratio
liability status
credit capacity status
income-to-liability ratio
Question 5. Question : (TCO 3) In determining your credit capacity, you first provide for basic
necessities, such as
furniture.
home furnishings.
mortgage or rent.
automobiles.
durable goods.
Question 6. Question : (TCO 3) If you ask to review your file within _____ days of being notified of a
denial based upon a credit report, the credit bureau cannot charge you a disclosure fee.
10
60
30
40
20
Question 7. Question : (TCO 3) If a bank needs to examine the value of a specific asset when you are
applying for a loan, this process refers to which aspect of the five Cs of lending?
Character
Capacity
Collateral
Capital
Conditions
Question 8. Question : (TCO 3) When reviewing your credit file, if you find that there is information that
is incorrect, then
there are legal remedies available to you.
you have no legal remedies.
credit bureaus are not required to change it.
you can’t really do much about it.
don’t worry much, because you will still get the credit.
Question 9. Question : (TCO 3) All of the following reasons are reasonable situations when you would
decide to use credit except

orrowing for a stay in a hospital because of appendicitis.
borrowing to pay for your expensive dinner and movie every week.
borrowing to buy a printer for your home office now because you know it will be twice as
expensive in 2 years.
borrowing to purchase a car so that you can go to work full time.
Question 10. Question : (TCO 3) Mary Jones has obtained a loan that must be paid over the next 12
months and she will use this money for a vacation. What type of credit is being used?
Installment sales credit
Incremental credit
Single lump sum credit
Revolving credit
Installment cash credit
Question 11. Question : (TCO 3) By evaluating your credit options, you can do all of the following except
reduce your finance charges.
reconsider your decision to borrow money.
discover a less expensive type of loan.
find a lender that charges a lower rate.
purchase goods and services without specific limitations.
Question 12. Question : (TCO 3) While collateralized loans may provide lower interest rates, these loans
have a disadvantage because
the loan must be repaid in a short period of time.
you ruin your credit rating.
the loan is difficult to obtain.
commercial banks do not make such loans.
the assets used as collateral are tied up until the loan has been repaid.
Question 13. Question : (TCO 3) Referring to trends in credit union membership, it can be observed that
membership has been
restricted by the Tax Reform Act of 1986.
declining gradually.
static.
growing steadily.
restricted by state laws.
Question 14. Question : (TCO 3) Which one of the following is a signal of a potential debt problem?
Paying the maximum balance due each month
Borrowing money to pay old debts
Using savings to pay for major purchases
Receiving notice of prompt payment from creditors

Occasionally working overtime and moonlighting
Question 15. Question : (TCO 3) Allison Smith starts the month with a balance of $1,100 on her credit
card. On the 10th day of the month, she purchases $200 in clothes with her credit card. On the 15th day
of the month, she makes a payment on her credit card of $500. The average daily balance for the month
including the new purchase is $883. The average daily balance for the month excluding the new purchase
is $750. Allison’s interest rate is 1.5% for the month. Allison’s bank calculates the finance charge on the
credit card by using the adjusted balance method. What would Allison’s finance charges be for the
month?
$7.50
$9.00
$11.25
$13.25
$16.50
Question 16. Question : (TCO 3) Jerry Dean starts the month with a balance of $1,500 on his credit
card. On the 10th day of the month, he purchases $200 in clothes with his credit card. On the 15th day of
the month, he makes a payment on his credit card of $500. The average daily balance for the month
including the new purchase is $883. The average daily balance for the month excluding the new purchase
is $750. Jerry’s interest rate is 1.5% for the month. Jerry’s bank calculates the finance charge on the
credit card by using the previous balance method. What would Jerry’s finance charges be for the month?
$7.50
$13.25
$15.00
$22.50
$18.00
Question 17. Question : (TCO 3) If Jeff rushes to purchase a home by obtaining an interest-only loan,
and the reason why he wants a home is because he wants to have a house just like the one that his
parents had when he was a teenager, this is an example of which of the following?
Misunderstanding or lack of communication
The use of money to punish
Overindulgence of children
Keeping up with the Joneses
The expectation of instant comfort
Question 18. Question : (TCO 3) Steve has three children and has purchased each of them his or her
own TV that is placed in his or her respective room. Which reason for indebtedness is this an example of?

Misunderstanding or lack of communication
Overindulgence of children
The expectation of instant comfort
Keeping up with the Joneses
The use of money to punish
Question 19. Question : (TCO 3) _____ families rely heaviest on student loans to finance college.
Low-income
Middle-income
High-income
Large Small
Question 20. Question : (TCO 3) If Tracy Sears borrows $1,250 for 1 year with an APR of 9% with no
service fees, what is her total cost of credit?
$125
$112.50
$7.50
$9.38
$0