1 | Page
GEB 3006 exam 3 financial literacy
Questions and Answers Latest 2026
What two factors count for 65% of your FICO score? Ans:
Payment history and outstanding debts
Which company has developed the MOST commonly used
credit score to evaluate an individual's credit? Ans: Fair
Isaac Corporation
You should try to achieve a FICO score of at least
________ in order to receive a top credit rating. Ans: 760
What is the debt to credit limit ratio for the following
individual?Visa Card Master Card Credit Limit $10,000
$20,000 Balance Due $2,000 $19,000 Available
Credit$8,000$1,000 Ans: 70%, and decreasing this ratio
will help the credit score
It is possible that canceling an old credit card with no
balance due could hurt your credit score. Ans: TRUE
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. Ans: TRUE
A married couple is applying for a mortgage. One spouse
has a low FICO score and one has a high FICO score. What
© 2025 All rights reserved
, 2 | Page
is their best strategy for getting the lowest interest rate
possible? Ans: Apply in the name of the spouse with the
highest score
Which of the following statements is true? Ans: The
treasury yield curve is normally upward sloping, with
long term rates being higher than short term rates.
Having mortgage debt is generally considered better than
having credit card debt. Ans: True
It is illegal for an employer to review your credit report
as part of the application process. Ans: 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. Ans: False
Insurance companies are allowed to review and consider
your credit score before quoting a premium. Ans: True
In general, applying for and receiving new credit cards
will tend to decrease your FICO score. Ans: True
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. Ans: False
© 2025 All rights reserved
, 3 | Page
Interest rates on 30 year fixed rate mortgages tend to
follow or correlate with: Ans: The 10 year treasury note
rate
Interest rates paid by corporations and individual are
normally derived from the current: Ans: The treasury
yield curve
At a given interest rate, extending the term of your auto
loan from 36 months to 60 months will: Ans: Decrease
your payment and increase the amount of interest paid
over the loan
Interest rates for corporations and individuals are set
based on the Treasury Yield Curve on any given day. The
curve represents the cost of borrowing for the federal
government, and Ans: Is generally upward sloping, with
short term interest rates being lower than long term
interest rates
If we experience a rapid increase in inflation, the Federal
Reserve would likely ________ interest rates. Ans: Increase
In the event that you had $10,000 to invest in a bank
Certificate of Deposit (CD), what would be your best
course of action in the event that you believed interest
rates were likely to increase in the coming years? Ans:
Invest in a short term CD and roll it over as it expires to
another short term CD
Borrowing on your 401-K plan is generally considered a
good financial move. Ans: False
© 2025 All rights reserved
GEB 3006 exam 3 financial literacy
Questions and Answers Latest 2026
What two factors count for 65% of your FICO score? Ans:
Payment history and outstanding debts
Which company has developed the MOST commonly used
credit score to evaluate an individual's credit? Ans: Fair
Isaac Corporation
You should try to achieve a FICO score of at least
________ in order to receive a top credit rating. Ans: 760
What is the debt to credit limit ratio for the following
individual?Visa Card Master Card Credit Limit $10,000
$20,000 Balance Due $2,000 $19,000 Available
Credit$8,000$1,000 Ans: 70%, and decreasing this ratio
will help the credit score
It is possible that canceling an old credit card with no
balance due could hurt your credit score. Ans: TRUE
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. Ans: TRUE
A married couple is applying for a mortgage. One spouse
has a low FICO score and one has a high FICO score. What
© 2025 All rights reserved
, 2 | Page
is their best strategy for getting the lowest interest rate
possible? Ans: Apply in the name of the spouse with the
highest score
Which of the following statements is true? Ans: The
treasury yield curve is normally upward sloping, with
long term rates being higher than short term rates.
Having mortgage debt is generally considered better than
having credit card debt. Ans: True
It is illegal for an employer to review your credit report
as part of the application process. Ans: 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. Ans: False
Insurance companies are allowed to review and consider
your credit score before quoting a premium. Ans: True
In general, applying for and receiving new credit cards
will tend to decrease your FICO score. Ans: True
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. Ans: False
© 2025 All rights reserved
, 3 | Page
Interest rates on 30 year fixed rate mortgages tend to
follow or correlate with: Ans: The 10 year treasury note
rate
Interest rates paid by corporations and individual are
normally derived from the current: Ans: The treasury
yield curve
At a given interest rate, extending the term of your auto
loan from 36 months to 60 months will: Ans: Decrease
your payment and increase the amount of interest paid
over the loan
Interest rates for corporations and individuals are set
based on the Treasury Yield Curve on any given day. The
curve represents the cost of borrowing for the federal
government, and Ans: Is generally upward sloping, with
short term interest rates being lower than long term
interest rates
If we experience a rapid increase in inflation, the Federal
Reserve would likely ________ interest rates. Ans: Increase
In the event that you had $10,000 to invest in a bank
Certificate of Deposit (CD), what would be your best
course of action in the event that you believed interest
rates were likely to increase in the coming years? Ans:
Invest in a short term CD and roll it over as it expires to
another short term CD
Borrowing on your 401-K plan is generally considered a
good financial move. Ans: False
© 2025 All rights reserved
