Exam (elaborations)
GEB 3006 EXAM 3 FINANCIAL LITERACY
- Course
- Institution
GEB 3006 EXAM 3 FINANCIAL LITERACY
[Show more]
Content preview
GEB 3006 EXAM 3 FINANCIAL LITERACYWhat two factors count for 65% of your FICO score?
a) Income and payment history
b) Employment history and outstanding debts
c) Payment history and outstanding debts
d) Income and outstanding debts - Answers-c) Payment history and outstanding debts
Which company has developed the MOST commonly used credit score to evaluate an
individual's credit?
a) Experian
b) Transunion
c) Fair Isaac Corporation
d) Equifax - Answers-c) Fair Isaac Corporation
You should try to achieve a FICO score of at least ________ in order to receive a top
credit rating.
a) 840
b) 640
c) 760
d) 940 - Answers-c) 760
What is the debt to credit limit ratio for the following individual?
Visa CardMaster CardCredit Limit$10,000$20,000Balance Due$2,000$19,000Available
Credit$8,000$1,000
a) 30%, and decreasing this ratio will help the credit score
b) 70%, and decreasing this ratio will help the credit score
c) 70%, and increasing this ratio will help the credit score
d) 30%, and increasing this ratio will help the credit score. - Answers-b) 70%, and
decreasing this ratio will help the credit score
True or False?
It is possible that canceling an old credit card with no balance due could hurt your credit
score. - Answers-True
True or False?
If an individual gets several quotes on a new mortgage within a two week period, it should
not immediately impact their credit score. The credit score may later be impacted by the
size of the mortgage and related monthly payments. - Answers-True
,A married couple is applying for a mortgage. One spouse has a low FICO score and one
has a high FICO score. What is their best strategy for getting the lowest interest rate
possible?
a) Apply in both spouses names since the banks will use the higher score in evaluating
the mortgage application.
b) Apply in the name of the spouse with the highest score. - Answers-b) Apply in the name
of the spouse with the highest score.
Which of the following statements is true?
a) You Answered The treasury yield curve is normally downward sloping, with long term
rates being higher than short term rates.
b) The treasury yield curve is normally upward sloping, with long term rates being higher
than short term rates.
c) The treasury yield curve is normally downward sloping, with short term rates being
higher than long term rates.
d) The treasury yield curve is normally upward sloping, with short term rates being higher
than long term rates. - Answers-b) The treasury yield curve is normally upward sloping,
with long term rates being higher than short term rates.
True or False?
Having mortgage debt is generally considered better than having credit card debt. -
Answers-True
True or False?
It is illegal for an employer to review your credit report as part of the application process.
- Answers-False
True or False?
Insurance companies are allowed to review and consider your credit score before quoting
a premium. - Answers-True
True or False?
Assume you have three credit cards, each having a balance due of $500 for a total of
$1,500. Each card has a different interest rate ranging from 12% to 20%. The minimum
payment on each card is $10. If the minimum payment is not made, there is a $50 penalty.
, If you only have $500 to pay on your credit cards this month, the best way to minimize
your interest cost is to pay an equal amount of money on each card. - Answers-False
True or False?
In general, applying for and receiving new credit cards will tend to decrease your FICO
score. - Answers-True
True or False?
Assume that your parents have more liabilities than assets as a result of a $100,000 of
credit card debt. In the event of their death, the children will inherit the credit card debt. -
Answers-False
Interest rates on 30 year fixed rate mortgages tend to follow or correlate with:
a) The 5 year treasury note rate
b) LIBOR
c) The 10 year treasury note rate
d) The 30 year treasury bond rate - Answers-c) The 10 year treasury note rate
Interest rates paid by corporations and individual are normally derived from the current:
a) The rate on mortgage backed securities
b) The treasury yield curve
c) ECB funds rate
d) Taylor curve - Answers-b) The treasury yield curve
Who sets monetary policy in the United States?
a) The President
b) The Congress
c) The Federal Reserve
d) The Supreme Court - Answers-c) The Federal Reserve
True or False?
A flat or inverted yield curve often signals a recession. - Answers-True
True or False?
It is generally a good idea to co-sign a loan for another individual in the event they do not
qualify for a loan. - Answers-False
True or False?
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller GEEKA. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
78834 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now