Chapter 6 using credit
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Chapter 6 Using Credit - Nothing to say
Principles of Finance (Trường Đại học Ngoại thương)
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lOMoARcPSD|10289698
Chapter 6—Using Credit
1. Using credit is the ideal way to provide for financial emergencies.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-1 - LO: 6-1
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
2. Saving is the preferred way to provide for financial emergencies.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-1 - LO: 6-1
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
3. Paying only the minimum payment each time on a credit card usually enables one to pay off the balance fairly quickly.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-1 - LO: 6-1
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
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Downloaded by Thanh H?ng ()
Page 1
lOMoARcPSD|10289698
Chapter 6—Using Credit
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
4. One can be overusing credit even though he can afford to make minimum monthly payments on time.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-1 - LO: 6-1
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
5. Credit should not consistently be used for nondurable goods.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-1 - LO: 6-1
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
6. Credit cards with very low minimum payment requirements are in the consumer's best interest.
a. True
b. Fals
e
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Page 2
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Chapter 6—Using Credit
ANSWER:
False
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-1 - LO: 6-1
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
7. A good rule to remember when considering the use of credit is that the product purchased on credit should outlive the
amount of time it takes to pay it off.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-1 - LO: 6-1
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
8. Never adding up all your bills is one of the signs that you may be headed for serious credit problems.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-1 - LO: 6-1
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
Cengage Learning Testing, Powered by Cognero
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Page 3
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Chapter 6—Using Credit
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
9. Using more than 20 percent of one's take-home income to pay off consumer debt is one of the signs that one may be
headed for serious credit problems.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-1 - LO: 6-1
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
10. Having a checking account tells a creditor that you have some experience in managing your own funds.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-2 - LO: 6-2
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
11. Always paying cash is helpful in establishing a high level of creditworthiness.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
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Page 4
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Chapter 6—Using Credit
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-2 - LO: 6-2
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
12. Having arranged and fully repaid a small loan should help improve creditworthiness.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-2 - LO: 6-2
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
13. The purpose of a credit report is to evaluate the kind of risk you pose to the lender.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-2 - LO: 6-2
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
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Page 5
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Chapter 6—Using Credit
14. Credit reports are routinely used to predict creditworthiness.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-2 - LO: 6-2
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
15. Paying a loan off much quicker than scheduled is one way to build a good credit rating.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-2 - LO: 6-2
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
16. A debt safety ratio of 25% might be a signal of financial trouble ahead.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-2 - LO: 6-2
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
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Downloaded by Thanh H?ng ()
Page 6
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Chapter 6—Using Credit
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
17. A debt safety ratio of 15% would generally be a signal of financial trouble ahead.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-2 - LO: 6-2
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
18. It is safe, and often required, to give your Social Security number as a form of identification when using a credit card.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-6 - LO: 6-6
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
19. The most common forms of open account credit are bank credit cards and retail charge cards.
a. True
b. Fals
e
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Page 7
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Chapter 6—Using Credit
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
20. The most common form of open account credit is the debit card.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
21. Auto loans are an example of open account credit since you can add to the debt when you purchase another vehicle.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY East
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
Cengage Learning Testing, Powered by Cognero
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Page 8
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Chapter 6—Using Credit
and Interest Rates
KEYWORDS: Bloom's: Understanding
22. A credit limit refers to the maximum amount the cardholder can owe the issuer at any point in time.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
23. The key to creditworthiness is to keep your debt safety ratio as high as possible.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-2 - LO: 6-2
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
24. Credit reports on individual borrowers are issued by credit bureaus.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
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Page 9
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Chapter 6—Using Credit
LEARNING O PFIN.BILL.17.6-4 - LO: 6-4
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
25. Credit reports on individual borrowers are issued by credit card issuers.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-4 - LO: 6-4
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
26. Being late on credit payments only 2-3 times per year may label you a "late payer" in your credit file.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
27. The required monthly payment on an open account will be the smaller of a minimum dollar amount or a specified
percentage of the balance.
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Chapter 6—Using Credit
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Challenging
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
28. Bank credit cards represent the most common kind of open account credit.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
29. Bank credit card purchases always begin accruing interest charges immediately.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Challenging
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
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Chapter 6—Using Credit
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
30. Advantages of balance transfers can include lower interest rates and the convenience of consolidation.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
31. Credit card statements must be sent out at least 21 days before the due date.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
32. College students without verifiable income cannot be issued credit cards.
a. True
b. Fals
e
ANSWER:
True
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Chapter 6—Using Credit
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
33. Rebate credit cards work best for those who use the rebates, charge a lot, and do not carry high monthly balances.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
34. Generally speaking, the interest rates on credit cards are lower than any other form of credit.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
Cengage Learning Testing, Powered by Cognero
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Chapter 6—Using Credit
KEYWORDS: Bloom's: Remembering
35. Credit card payments received the next business day after a holiday or weekend due date are considered on time.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
36. Your account with the utility company is an example of open account credit.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-4 - LO: 6-4
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
37. Interest rates on credit cards tend to be lower than most other forms of consumer credit.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
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Page 14
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Chapter 6—Using Credit
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
38. Most organizations that issue credit cards have basically the same qualifications for card applicants.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
39. Credit cards often have penalties for late payment and for exceeding credit limits.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
40. Open account credit is a form of credit extended to a consumer in advance of any transaction.
a. True
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Chapter 6—Using Credit
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
41. The most common method used by lenders to apply finance charges to credit cards is the average daily balance
including new purchases method.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Challenging
:
LEARNING O PFIN.BILL.17.6-4 - LO: 6-4
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
42. As a rule, the smaller the bank or S&L, the more likely it is to charge an annual fee for its credit cards.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
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Chapter 6—Using Credit
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
43. Credit card users can often avoid finance charges entirely by paying their total balances by the stated due date.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
44. Secured credit cards require that the cardholder put up collateral in order to get the card.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
45. Student credit cards are structured much differently than regular credit cards.
a. True
b. Fals
e
ANSWER:
False
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Chapter 6—Using Credit
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
46. Due to the Credit Card Act of 2009, finance charges can no longer be calculated using the double-cycle billing
approach.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
47. Debit cards look like credit cards, but they work like checks.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
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Chapter 6—Using Credit
KEYWORDS: Bloom's: Remembering
48. With prepaid cards, there is no established line of credit.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
49. Prepaid cards are referred to as electronic wallets.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
50. Revolving credit lines are often accessed by writing checks.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
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Chapter 6—Using Credit
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
51. Unsecured lines of credit provide tax advantages if you itemize deductions.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Challenging
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
52. Unsecured lines of credit are easy to use and often use some form of collateral as default protection.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Challenging
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
53. The proceeds of a home equity loan can be used for just about any purpose, and the interest paid is usually tax
deductible.
a. True
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Chapter 6—Using Credit
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
54. One can lose his home if he does not repay his home equity line of credit.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
55. Home equity loans are one of the least expensive forms of consumer credit.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
Cengage Learning Testing, Powered by Cognero
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Chapter 6—Using Credit
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
DARDS:
56. For someone with a good credit rating, lenders will typically lend up to 100% of equity in a home using a home equity
credit line.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-3 - LO: 6-3
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
57. For a fee, credit bureaus can provide credit scores for prospective borrowers.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-4 - LO: 6-4
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
58. Credit bureaus provide information about prospective borrowers.
a. True
b. Fals
e
ANSWER:
True
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Chapter 6—Using Credit
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-4 - LO: 6-4
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
59. One can and should check his credit bureau file regularly.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Moderate
:
LEARNING O PFIN.BILL.17.6-4 - LO: 6-4
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Applying
60. Credit bureau files often include information such as political and religious affiliations in addition to financial
information.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-4 - LO: 6-4
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
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Chapter 6—Using Credit
KEYWORDS: Bloom's: Remembering
61. Credit scoring systems are often used by lenders to determine your creditworthiness.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Easy
:
LEARNING O PFIN.BILL.17.6-4 - LO: 6-4
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
62. Chapter 7 bankruptcies can remain in your credit file for up to 10 years.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY Challenging
:
LEARNING O PFIN.BILL.17.6-6 - LO: 6-6
BJECTIVES:
NATIONAL S United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
TANDARDS:
STATE STAN United States - AK - DISC: Capital budgeting and cost - DISC: Capital budgeting
DARDS:
and cost of capital
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
63. A credit card user's credit rating will be harmed if she pays only the minimum monthly payment on a credit card.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY Challenging
:
LEARNING O PFIN.BILL.17.6-4 - LO: 6-4
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Page 24
