finance 310 exam UPDATED ACTUAL
Exam Questions and CORRECT Answers
from a borrower's perspective, you're better off with an ARM if interest rates rise - CORRECT
ANSWER - false
Financially savvy people take advantage of the grace period on major purchases and pay the
balance off in full; thus avoiding finance charges. - CORRECT ANSWER - true
unsecured loans are generally less risky to lenders than secured loans. therefore, secured loans
typically charge a higher APR than unsecured loans - CORRECT ANSWER - false
using you credit cards for cash advances is a relatively cheap way to borrow money - CORRECT
ANSWER - false
life insurance and health insurance are designed to transfer catastrophic risk you can't afford to
keep onto the insurance companies - CORRECT ANSWER - true
defaulting on a secured loan may lead to the collateral being repossessed - CORRECT
ANSWER - true
carrying credit cards can increase impulse purchasing - CORRECT ANSWER - true
leasing a car may make sense if you drive over 25,000 miles a year - CORRECT
ANSWER - false
payday loans are a dangerous way to borrow money and charge an annual interest rate of almost
400% - CORRECT ANSWER - true
, in dealing with risk, one can either avoid it, manage it, or transfer it for a fee - CORRECT
ANSWER - true
which one of the following is not a key to finding housing that fits your needs? - CORRECT
ANSWER - insurance costs
the __________ is the entity who designates the beneficiary of the insurance policy - CORRECT
ANSWER - policy owner
of the following possible sources of credit, which typically has the lowest borrowing rate? -
CORRECT ANSWER - credit union
the main factor that determines the costs of a line of credit is the _______, which is also
considered the true simple interest rate paid over the life oft he loan - CORRECT
ANSWER - annual percentage rate (APR)
PITi stands for the total of your monthly - CORRECT ANSWER - principal, interest,
taxes, and insurance.
variable-rate loans - CORRECT ANSWER - usually have rate caps that prevent them from
varying too much
credit cards are a form of _______ credit - CORRECT ANSWER - revolving
which of the following is an advantage of credit cards? - CORRECT ANSWER - they
allow the consumer the ability to rent cars and make online reservations
suppose you borrowed the money you needed to purchase an automobile and then failed to make
a scheduled payment by the due data. technically, you - CORRECT ANSWER - are default
for the convenience credit card user, the interest rate is - CORRECT ANSWER - irrelevent
Exam Questions and CORRECT Answers
from a borrower's perspective, you're better off with an ARM if interest rates rise - CORRECT
ANSWER - false
Financially savvy people take advantage of the grace period on major purchases and pay the
balance off in full; thus avoiding finance charges. - CORRECT ANSWER - true
unsecured loans are generally less risky to lenders than secured loans. therefore, secured loans
typically charge a higher APR than unsecured loans - CORRECT ANSWER - false
using you credit cards for cash advances is a relatively cheap way to borrow money - CORRECT
ANSWER - false
life insurance and health insurance are designed to transfer catastrophic risk you can't afford to
keep onto the insurance companies - CORRECT ANSWER - true
defaulting on a secured loan may lead to the collateral being repossessed - CORRECT
ANSWER - true
carrying credit cards can increase impulse purchasing - CORRECT ANSWER - true
leasing a car may make sense if you drive over 25,000 miles a year - CORRECT
ANSWER - false
payday loans are a dangerous way to borrow money and charge an annual interest rate of almost
400% - CORRECT ANSWER - true
, in dealing with risk, one can either avoid it, manage it, or transfer it for a fee - CORRECT
ANSWER - true
which one of the following is not a key to finding housing that fits your needs? - CORRECT
ANSWER - insurance costs
the __________ is the entity who designates the beneficiary of the insurance policy - CORRECT
ANSWER - policy owner
of the following possible sources of credit, which typically has the lowest borrowing rate? -
CORRECT ANSWER - credit union
the main factor that determines the costs of a line of credit is the _______, which is also
considered the true simple interest rate paid over the life oft he loan - CORRECT
ANSWER - annual percentage rate (APR)
PITi stands for the total of your monthly - CORRECT ANSWER - principal, interest,
taxes, and insurance.
variable-rate loans - CORRECT ANSWER - usually have rate caps that prevent them from
varying too much
credit cards are a form of _______ credit - CORRECT ANSWER - revolving
which of the following is an advantage of credit cards? - CORRECT ANSWER - they
allow the consumer the ability to rent cars and make online reservations
suppose you borrowed the money you needed to purchase an automobile and then failed to make
a scheduled payment by the due data. technically, you - CORRECT ANSWER - are default
for the convenience credit card user, the interest rate is - CORRECT ANSWER - irrelevent
