In your daily life, you will need to prioritize a variety of financial tasks. You will need to prioritize big spending decisions such as getting loans, paying for school, and responsibly using credit. You will also need to prioritize smaller spending decisions like how much to spend on lunch or whether to buy a new coat now or wait until it is on sale. By understanding the resources available to you for financial planning, you will be able to make effective financial decisions.

 

In this assessment, you complete a 40-question test about the role of credit and debt in financial planning and decision-making. You have 2 attempts to take the test.

 

1. What are the 2 main factors that contribute to how much interest is paid on a mortgage loan?
2. Repayment period and interest rate
3. Repayment period and cost of insurance
4. Repayment period and closing costs
5. Interest rate and closing costs

 

2. A friend has a credit score of around 500. What are the chances of that friend having a new credit application rejected?

 

1. Low
2. High
3. Moderate
4. The answer depends on how the credit score was calculated.

 

3. Karen determined how much she could afford to spend per month for a car payment. Which priority will help Karen shop for the lowest cost loan?

 

1. Negotiating for the smallest down payment
2. Negotiating for the lowest annual percentage rate (APR)
3. Negotiating for the longest maturity
4. Complimenting the salesperson

 

4. What measure minimizes the possibility of someone using another person’s credit or debit cards in a fraudulent manner?

 

1. Making copies of receipts
2. Keeping all your cards in your purse or pocket to avoid forgetting them
3. Saving your account numbers on your phone
4. Reconciling statements monthly

 

5. A finance charge includes which elements?
6. Interest, fees, and principal
7. Interest and principal
8. Fees and principal
9. Interest and fees

 

6. Josiah owes $3,500 on his credit card with a minimum percentage of 3% or $100 (whichever is higher). How much is the minimum payment due?

 

1. $3,500
2. $200
3. $100
4. $105

 

7. Where does the Federal Deposit Insurance Corporation (FDIC) insure accounts?

 

1. Credit unions
2. Banks
3. The stock exchange
4. Brokerage companies

 

8. What should a person do if they are a victim of identity theft? Select all that apply.

 

1. Check with their insurance agent. Some homeowners and renters insurance policies include coverage for stolen identity and/or financial frauds.
2. Find out who stole their identity and go after them personally.
3. Contact the local police or sheriff’s department.
4. Alert their credit card company or financial institution.

 

9. What input makes up the largest portion of a person’s FICO® score?

 

1. Amount of credit
2. New credit
3. Payment history
4. Length of credit history

 

10. Rebecca is planning on attending college in the fall. She has been saving money for a year to pay her tuition, but she is about $1,500 short. Which of the following borrowing options would cost her the least overall?

 

1. Student loan
2. Credit card
3. Payday loan
4. Personal loan at bank

 

 

11. For the back-end mortgage qualification ratio, the maximum debt payment is what percent?

 

1. 43%
2. 40%
3. 42%
4. 36%

 

12. What must loan contracts disclose to credit applicants?

 

1. Annual percentage rate (APR)
2. Annual interest rate
3. Periodic percentage rate
4. Periodic interest rate

 

13. Roberto is applying for a mortgage. He has a monthly gross income of $3,500. The home he would like to buy has monthly payments for the following: $1,000 mortgage, $150 property taxes, $75 homeowners insurance premium, and $75 mortgage insurance premium. Roberto also has other monthly debts totaling $500 per month. Based on the Federal Housing Administration (FHA) total fixed payments-to-income ratio, would he qualify for the mortgage loan?

 

1. Yes, his total fixed payments-to-income ratio is 37%.
2. No, his total fixed payments-to-income ratio is 37%.
3. No, his total fixed payments-to-income ratio is 51%.
4. Yes, his total fixed payments-to-income ratio is 51%.

 

14. Negative items on a person’s credit report include which of the following?3

 

1. Low credit balances
2. A person’s request to review their own credit report
3. Accounts sent to collections
4. A bank account that has a balance of less than $500

 

15. What is the relationship between annual percentage rate (APR) and the true cost of credit?

 

1. The lower the APR, the lower the true cost of credit
2. There is no relationship between the two.
3. The higher the APR, the lower the true cost of credit
4. The lower the APR, the higher the true cost of credit

 

 

16. Which of the following seals a person’s credit reports so that no new accounts can be opened?

 

1. Credit check
2. Credit freeze
3. Credit monitoring
4. Credit score

 

 

17. A recent survey of U.S. households asked if they had $2,000 for an unexpected expense. Approximately what percentage of all U.S. consumers said that they could probably not or certainly not have $2,000 for an unexpected expense?

 

1. 10%
2. 50%
3. 25%
4. 75%

 

18. Maarku lost his debit card. He reported it immediately before any unauthorized withdrawals were made. How much of the charges is Maarku responsible for?

 

1. $50
2. $0
3. $500
4. $600

 

19. Mark and Betty want to keep $300,000 of their savings Federal Deposit Insurance Corporation (FDIC) insured. How could they accomplish this?

 

1. Divide the money equally into stocks and mutual funds at the brokerage firm.
2. Divide the money equally and deposit it at 2 different banks.
3. Divide the money equally into a mutual fund and a checking account at a bank.
4. Invest $100,000 in a money market mutual fund and $200,000 in a savings account at the bank.

 

20. How many years can credit reporting agencies maintain negative information (excluding a bankruptcy) on a person’s credit report?

 

1. 10 years
2. 7 years
3. 15 years
4. Forever

 

 

21. How does the age of an account affect a person’s credit score?

 

1. The longevity of an account only matters if the person had declared bankruptcy.
2. The younger the account, the better the person’s FICO® score is.
3. The longevity of an account has no bearing on a person’s credit score.
4. The older the account, the better the person’s FICO® score is.

 

22. Which ratio is the total amount of credit lines available compared to how much is used?

 

1. FICO® ratio
2. Payment ratio
3. Vantage ratio
4. Credit usage ratio

 

23. Ladonna borrowed $2,000 to purchase a used car. The total amount she will need to pay includes the $2,000 she borrowed, $200 in interest, and $75 in loan fees. Using that information, what is the finance charge on Ladonna’s loan?

 

1. $2,275
2. $200
3. $275
4. $75

 

24. If a tenant becomes 90 days late in rent payments, what can the landlord do?

 

1. Put a hold on the tenant’s bank account.
2. Lock the tenant out of their apartment.
3. Take possession of the tenant’s personal property as payment for unpaid rent.
4. Sue the tenant in civil court for rent and legal expenses, while starting the eviction process.

 

25. Amar lost his debit card on May 1. He reported it missing the next day; however, $600 had already been spent on the debit card without the use of his PIN number. How much of his loss is Amar responsible for?

 

1. $50
2. $500
3. $600
4. $0

 

26. There are various types of credit that are part of calculating a person’s FICO® score. What is the input percentage of these types of credits toward a FICO score?

 

1. 10%
2. 35%
3. 20%
4. 30%

 

27. Which ratio is the sum of monthly housing payments, plus all other monthly debt payments, and then divided by total monthly income?

 

1. Liquidity
2. Total fixed payments-to-income
3. Net worth
4. Debt-to-income

 

28. Which is an example of revolving credit?

 

1. Student loans
2. Car loans
3. Mortgage loan
4. Credit cards

 

29. According to the U.S. Department of Housing and Urban Development (HUD), what is the maximum percentage of pre-tax income a person should spend on rent?

 

1. 30%
2. 40%
3. 50%
4. 20%

 

30. What information is included in a credit report?

 

1. Education history
2. Compensation history
3. Inquiry history
4. Checking account balance

 

31. According to the Federal Housing Administration (FHA), what is the maximum percentage of a person’s monthly income that should be spent on housing expenses?

 

1. 35%
2. 31%
3. 21%
4. 25%

 

32. How long can credit reporting agencies maintain bankruptcy information on a person’s credit report?
33. For up to 10 years
34. For up to 15 years
35. Forever
36. For up to 7 years

 

33. Which of the following is a scam that is typically based on selling products and/or recruiting new members into an organization?

 

1. Pyramid scheme
2. Identity theft
3. Ponzi scheme
4. Telemarketing fraud

 

34. Which card requires the borrower to deposit the full amount of the line of credit at the bank as collateral before the card is issued?

 

1. Debit card
2. Prepaid debit card
3. Secured credit card
4. Reward credit card

 

35. Amar owes $2,000 on his credit card with a minimum percentage of 4% or $60, whichever is higher. How much is the minimum payment due?

 

1. $2,000
2. $140
3. $80
4. $60

 

36. How many days do the credit bureaus have to investigate fraud once a person notifies them in writing that their information is inaccurate?

 

1. 20 days
2. 30 days
3. 60 days
4. 10 days

 

37. How will having a credit score of 775 impact a person’s application for new credit?

 

1. The person will likely be approved for new credit.
2. The person will likely be approved and receive the best borrowing terms.
3. The credit score will not affect the person’s application.
4. The person will likely be rejected for new credit.

 

38. Cedar just graduated from college. He accepted a position with a firm at an annual salary of $45,000. Using the U.S Department of Housing and Urban Development (HUD) guidelines, what is the maximum amount Cedar should pay for rent on a monthly basis?

 

1. $1,300
2. $1,200
3. $1,125
4. $1,250

 

39. Which amount of time allows a bill to be paid without incurring interest?

 

1. 60 days
2. 30 days
3. A grace period
4. An introductory period

 

40. Tenzin has determined that she can afford to spend $575 per month on a vehicle. She also knows that other monthly car-ownership expenses are $60 for gas, $75 for insurance, $30 for maintenance, and $25 for repairs. What is the maximum monthly car payment Tenzin could afford?

 

1. $575
2. $440
3. $410
4. $385

 

 

This assignment contains a Microsoft Word document.

Click HERE for more FP100T weeks.

If you would like to order an original assignment, please contact info@prowriting.co or text (617) 299-6181. Kindly visit our original assignment website www.prowriting.co

$100.00 – Purchase Checkout Added to cart