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FINANCE 101 EXAM 2 QUESTIONS & ANSWERS VERIFIED 100% CORRECT!!
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FINANCE 101 EXAM 2 QUESTIONS & ANSWERS VERIFIED 100% CORRECT!!
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FINANCE 101 EXAM 2QUESTIONS &
ANSWERS VERIFIED
100% CORRECT!!
FINANCE 101
Evatee 8/28/24 FINANCE 101
,FINANCE 101 EXAM 2 QUESTIONS &
ANSWERS VERIFIED 100% CORRECT!!
which of the following lenders will likely provide the lowest interest rate to
qualified borrowers?
a- retails/ store credit card
b- credit card company
c- title loan lender
d- banks and credit unions Answer - d
rank these loans from least expensive to most expensive: payday loan, cash
advance on a credit card, pawnshop loan, subsidized student loan Answer -
subsidized student loan
cash advance on a credit card
pawnshop loan
payday loan
why do consumer advocates advise against using alternative financial services?
a- because the amount that can be borrower is too little to get through an
emergency
b- because the high cost associated with the loans and other services
c- because they have a conflict of interest and invest in bank stock
d- because of the poor customer service provided by alternative financial
service providers Answer - b
,aman is attending school and had a financial emergency. he contacted his
schools financial aid office and asked about a subsidized student loan. amass
school facilitates these loans and determined that aman qualifies for a $170
loan. aman is able to repay the loan over the next 12 months while he is still in
school. how much interest will aman pay on this loan?
a- $0 because interest on subsidized loans does not accrue until aman stops
attending school
b- $8.50 because the interest rate is 5%
c- $4.25 because man has been making payments on the loan
d- none of the choices are correct Answer - a
all of the following statements are true, except:
a- individuals without credit reports should always first apply to mainstream
lenders
b- reliance on credit reports and credit scores often differentiates mainstream
and alternative financial service providers
c- there is a relatively small difference in the total finance charge between
mainstream and alternative financial service providers
d- a personal bank loan requires that an application be completed Answer - c
some individuals facing financial emergencies will attempt to skip certain
payments to make other payments. this strategy is generally not helpful
because:
a- the individuals credit report and credit score will be adversely affected
b- if income does not increase or expenses do not decrease, then nothing will
change in the long run
, c- this will likely lead to higher borrowing costs in the future
d- all the choices are correct Answer - d
an advantage of a line of credit from a bank over an installment loan is that:
a- If the borrowed funds are repaid, then the credit line is still available for
future use without having to apply for another loan
b- it is generally an unsecured loan
c- the interest rate is competitive with other low-cost forms of credit
d-all of the choices are correct Answer - a
collateral is:
a- required for all personal loans
b- only required if a credit score is not high enough
c- used with unsecured loans
d- property that can be taken by the lender if a loan is unpaid Answer - d
with an installment loan, the borrower:
a- receives the full amount of money upfront and then makes regular payments
to repay the loan and interest
b- is told how much she or he can potentially borrow, and then using a debit
card or checkbook, the borrower can access the money and repay the loan and
interest through flexible repayments
c- can receive short term loan from a bank or credit union by pledging an
upcoming automatic account deposit, such as paycheck, as repayment of the
loan and fees
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