BPA – BANKING AND FINANCE EXAM QUESTIONS
WITH VERIFIED ANSWERS
credit - ANSWER an agreement to obtain goods/services now in exchange for
promise pay in the future
What affects the amount of interest paid? - ANSWER interest rate, length of
time, amount of loan
Consumer Credit - ANSWER credit used by people for personal reasons
Commercial Credit - ANSWER used by businesses
Credit Limit - ANSWER point where you cannot charge anymore
Charge Account - ANSWER provided by a store or company for customers to
buy products
Credit Cards - ANSWER like charge accounts , except can be used anywhere,
issued by a bank
How do banks earn money from credit cards? - ANSWER charging fees,
penalties, interest
single-purpose cards - ANSWER buy goods and services only at place card
was issued ex. store credit card
multi-purpose cards - ANSWER bank credit cards
travel and entertainment cards - ANSWER used for expenses relating to travel
and entertainment, must pay balance in full monthly
single-payment loans - ANSWER debtor pays back in ONE payment
installment loans - ANSWER loans paid in regular payments overtime
, ex. student loans, car payments
mortgage loan - ANSWER installment written for along period of time, 15-30
years, usually for homes, bank can take home if not paid back
seller-provided credit - ANSWER stores that give credit to consumers
consumer finance companies - ANSWER loans for people who might not get
credit elsewhere, there is a higher interest rate as there is higher risk
payday and advance services - ANSWER short term loans until payday, lasts
5-14 days, higher fees and interest rates
pawnship loan - ANSWER based on value of item left with pawnbroker for
security, can buy back item later
what does cost of credit include? - ANSWER APR, fees for late payments and
annual fees, fees for cash advances,
cash advance - ANSWER loan given in cash by credit card companies in
anticipation of being able to be paid back later
cosigner - ANSWER someone who agrees to be respobsible for debt if main
applicant cannot pay
grace period - ANSWER amount of time to repay debt without interest charges
What are the 3 c's of credit? - ANSWER capacity, character, capitol
capcity - ANSWER ability to repay a loan
character - ANSWER if applicant has been able to repay in past
capitol - ANSWER money you have beyond debts
credit limit - ANSWER max a person can charge of a card
loan - ANSWER money lent and paid back with interest
WITH VERIFIED ANSWERS
credit - ANSWER an agreement to obtain goods/services now in exchange for
promise pay in the future
What affects the amount of interest paid? - ANSWER interest rate, length of
time, amount of loan
Consumer Credit - ANSWER credit used by people for personal reasons
Commercial Credit - ANSWER used by businesses
Credit Limit - ANSWER point where you cannot charge anymore
Charge Account - ANSWER provided by a store or company for customers to
buy products
Credit Cards - ANSWER like charge accounts , except can be used anywhere,
issued by a bank
How do banks earn money from credit cards? - ANSWER charging fees,
penalties, interest
single-purpose cards - ANSWER buy goods and services only at place card
was issued ex. store credit card
multi-purpose cards - ANSWER bank credit cards
travel and entertainment cards - ANSWER used for expenses relating to travel
and entertainment, must pay balance in full monthly
single-payment loans - ANSWER debtor pays back in ONE payment
installment loans - ANSWER loans paid in regular payments overtime
, ex. student loans, car payments
mortgage loan - ANSWER installment written for along period of time, 15-30
years, usually for homes, bank can take home if not paid back
seller-provided credit - ANSWER stores that give credit to consumers
consumer finance companies - ANSWER loans for people who might not get
credit elsewhere, there is a higher interest rate as there is higher risk
payday and advance services - ANSWER short term loans until payday, lasts
5-14 days, higher fees and interest rates
pawnship loan - ANSWER based on value of item left with pawnbroker for
security, can buy back item later
what does cost of credit include? - ANSWER APR, fees for late payments and
annual fees, fees for cash advances,
cash advance - ANSWER loan given in cash by credit card companies in
anticipation of being able to be paid back later
cosigner - ANSWER someone who agrees to be respobsible for debt if main
applicant cannot pay
grace period - ANSWER amount of time to repay debt without interest charges
What are the 3 c's of credit? - ANSWER capacity, character, capitol
capcity - ANSWER ability to repay a loan
character - ANSWER if applicant has been able to repay in past
capitol - ANSWER money you have beyond debts
credit limit - ANSWER max a person can charge of a card
loan - ANSWER money lent and paid back with interest
