UGBA 135 Final Exam (Fall 2021) Questions And
Answers With Complete Solutions.
1). The rule of 72 is used to estimate
a. how long will it take you to earn 50%?
b. how long it will take you to out-earn inflation?
c. how long it will take to double your money?
d. none of the above
Ans: C (How long it will take to double your money)
2). Compounding means earning interest on interest (t/f)
Ans: True
3). Who said compound interest is the greatest discovery of mankind?
Ans: Albert Eienstien
4). The best time to decide how much to save for retirement each month is at the end of the
month when you can see how much money you have left over from the month's paycheck
(t/f)
Ans: False
5). The the best time to establish credit is when you don't need it (t/f)
Ans: True
6). The "cornerstone" of wealth is
Ans: Being frugal, not cheap but value oriented
7). Which is not "consideration" when creating a contract?
a. money.
b. gender.
c. physical objects.
d. services.
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, Ans: B (Gender)
8). When entering into a contract, which is not important?
a. the contract being witnessed by a lawyer.
b. what happens if any party fails to perform?
c. all blanks should be filled.
d. what constitutes the end of the contract?
Ans: A ( The contract being witnessed by a lawyer)
9). Which of the following is important when signing a contract?
a. what is the reputation of the other parties?
b. is mediation or arbitration required?
c. what constitutes the end of the contract?
d. all of the above.
Ans: D (all of the above)
10). Difference between revenues and earnings
Ans: Revenues: sales, money coming in
earnings: profits, money you make after all bills are paid
11). Which of the following is true regarding federal student loans?
a. congress determines the interest rate each year
b. interest rates are linked to the 10-year treasury rate
c. interest rates for plus loans are lower than the 10-year treasury rate
d. interest rates for grad students are less than those for undergrads
Ans: B (Interest rates are linked to the 10-year Treasury rate)
12). What factors directly affect your credit score? (choose all that apply).
a. annual income
b. length of credit history
c. payment history
d. debt burden
Ans: B C D
13). Which factor has the largest direct impact on your credit score?
a. length of credit history
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, b. debt burden
c. payment history
d. annual income
Ans: C (payment history)
14). Which of the following is not a major credit reporting agency?
a. discover
b. transunion
c. equifax
d. experian
Ans: A. (Discover)
15). A variable rate of interest is now commonly used by credit card issuers (t/f)
Ans: True
16). Once your credit card is on a variable interest rate, your total interest rate can rise without
your consent. (t/f)
Ans: True
17). Which is not an interest rate?
a. variable
b. fixed
c. revolving
d. go-to
Ans: C. (revolving)
18). True or false: the only interest you pay on your credit card balance is your go to rate
Ans: False
19). A default rate of interest is a lower rate of credit card interest (t/f)
Ans: False
20). If you are more than 60 days late in making minimum payment the issuer may charge you
the interest default rate (t/f)
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, Ans: True
21). Under the "card act" the interest default rate may not exceed 35%
Ans: False
22). A credit card fee may be charged for:
a. universal default.
b. late payment/closing account.
c. double cycle billing,
d. having a grace period.
Ans: B. (Late payment/closing account.)
23). To avoid a late payment fee, if paying by mail the payment must be
a. postmarked by the due date
b. received by the due date
c. mailed by the due date
d. none of the above
Ans: B. (Received by the due date)
24). If you charge more than your credit limit you'll get a late payment fee (t/f)
Ans: False
25). To avoid a late payment penalty fee when paying by mail it must be postmarked no later
than 5pm on the due date (t/f)
Ans: False
26). Banks may waive over the limit fees and late penalties the first time if you ask (t/f)
Ans: True
27). If you're the victim of credit card theft, what do you do? (r)
Ans: Contact the credit card issuer or bank immediately
28). What is the minimum criteria for a credit score? or card check (r)
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Answers With Complete Solutions.
1). The rule of 72 is used to estimate
a. how long will it take you to earn 50%?
b. how long it will take you to out-earn inflation?
c. how long it will take to double your money?
d. none of the above
Ans: C (How long it will take to double your money)
2). Compounding means earning interest on interest (t/f)
Ans: True
3). Who said compound interest is the greatest discovery of mankind?
Ans: Albert Eienstien
4). The best time to decide how much to save for retirement each month is at the end of the
month when you can see how much money you have left over from the month's paycheck
(t/f)
Ans: False
5). The the best time to establish credit is when you don't need it (t/f)
Ans: True
6). The "cornerstone" of wealth is
Ans: Being frugal, not cheap but value oriented
7). Which is not "consideration" when creating a contract?
a. money.
b. gender.
c. physical objects.
d. services.
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, Ans: B (Gender)
8). When entering into a contract, which is not important?
a. the contract being witnessed by a lawyer.
b. what happens if any party fails to perform?
c. all blanks should be filled.
d. what constitutes the end of the contract?
Ans: A ( The contract being witnessed by a lawyer)
9). Which of the following is important when signing a contract?
a. what is the reputation of the other parties?
b. is mediation or arbitration required?
c. what constitutes the end of the contract?
d. all of the above.
Ans: D (all of the above)
10). Difference between revenues and earnings
Ans: Revenues: sales, money coming in
earnings: profits, money you make after all bills are paid
11). Which of the following is true regarding federal student loans?
a. congress determines the interest rate each year
b. interest rates are linked to the 10-year treasury rate
c. interest rates for plus loans are lower than the 10-year treasury rate
d. interest rates for grad students are less than those for undergrads
Ans: B (Interest rates are linked to the 10-year Treasury rate)
12). What factors directly affect your credit score? (choose all that apply).
a. annual income
b. length of credit history
c. payment history
d. debt burden
Ans: B C D
13). Which factor has the largest direct impact on your credit score?
a. length of credit history
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, b. debt burden
c. payment history
d. annual income
Ans: C (payment history)
14). Which of the following is not a major credit reporting agency?
a. discover
b. transunion
c. equifax
d. experian
Ans: A. (Discover)
15). A variable rate of interest is now commonly used by credit card issuers (t/f)
Ans: True
16). Once your credit card is on a variable interest rate, your total interest rate can rise without
your consent. (t/f)
Ans: True
17). Which is not an interest rate?
a. variable
b. fixed
c. revolving
d. go-to
Ans: C. (revolving)
18). True or false: the only interest you pay on your credit card balance is your go to rate
Ans: False
19). A default rate of interest is a lower rate of credit card interest (t/f)
Ans: False
20). If you are more than 60 days late in making minimum payment the issuer may charge you
the interest default rate (t/f)
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, Ans: True
21). Under the "card act" the interest default rate may not exceed 35%
Ans: False
22). A credit card fee may be charged for:
a. universal default.
b. late payment/closing account.
c. double cycle billing,
d. having a grace period.
Ans: B. (Late payment/closing account.)
23). To avoid a late payment fee, if paying by mail the payment must be
a. postmarked by the due date
b. received by the due date
c. mailed by the due date
d. none of the above
Ans: B. (Received by the due date)
24). If you charge more than your credit limit you'll get a late payment fee (t/f)
Ans: False
25). To avoid a late payment penalty fee when paying by mail it must be postmarked no later
than 5pm on the due date (t/f)
Ans: False
26). Banks may waive over the limit fees and late penalties the first time if you ask (t/f)
Ans: True
27). If you're the victim of credit card theft, what do you do? (r)
Ans: Contact the credit card issuer or bank immediately
28). What is the minimum criteria for a credit score? or card check (r)
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