PFM - Ch.2 Consumer Credit

PP 2012 Q21

Which of the following client information is the least relevant factor for a bank to reject a client’s application for a credit card? (84%)

• Record of repayment

• Degree of loyalty to the bank

• Level of outstanding debts

• Record of bankruptcy

PP 2014 Q8 Which of the following statements about credit cards are correct?

(1)     A credit limit is set.

(2)     A minimum payment is set for the outstanding balance.

(3)     Interest will not be charged on the remaining balance

if the minimum payment is made before the due date.

(57%)

• (1)   and (2) only

• (1)   and (3) only

• (2)   and (3) only

• (1)  , (2) and (3)

PP2014 Q28

Maintaining a good personal credit record is important because it will

(1)     lower the cost of loans

(2)     increase the chance of getting loans

(3)     increase the upper limit of 70% on mortgage loans from banks

(52%)

• (1) and (2) only

• (1) and (3) only

• (2) and (3) only

• (1) , (2) and (3)

PP 2015 Q8

Mr Cheung plans to buy a residential property. Which of the following types of credit arrangement is most appropriate for him? (70%)

• credit card

• personal loan

• mortgage loan

• bank overdradft

PP 2016 Q9 A credit card user

(1)     can buy goods and services overseas with a credit card issued in Hong Kong.

(2)     can settle the whole outstanding balance of the statement by the due date

in order to avoid interest charges.

(3)     can enjoy a lower interest rate to settle the overdue credit card balance

than for a personal loan. (70%)

• (1) and (2) only

• (1) and (3) only

• (2) and (3) only

• (1) , (2) and (3)

PP2017 Q23

Which of the following are the benefits for a borrower

of maintaining a good personal credit record? (60%)

(1)     Lower interest rate on personal loan

(2)     Higher credit limit

(3)     Better terms when opening a term deposit account

• (1) and (2) only

• (1) and (3) only

• (2) and (3) only

• (1), (2) and (3)

PP2018 Q13

Which of the following statements about a bank overdraft is/are correct? (30%)

(1) There is no fixed repayment schedule.

(2) Its interest is usually charged on a monthly basis.

(3) Collateral is usually not required.

A.       (1) only

• (1) only

• (1) and (3) only

• (2) and (3) only

• (1), (2) and (3)

PP2019 (Q8)

Paul has taken out a 3-year personal loan of $100,000 at an annual interest rate of 12%, compounded monthly. Which of the following statements is/are correct? (38%)

 

(1)The annual nominal interest rate of the loan is 12%.

(2)The annual effective interest rate of the loan is higher than 12%.

(3)In general, the interest rate for a personal loan is lower than that for a credit card.

 

• (1) only

• (1) and (2) only

• (2) and (3) only

• (1), (2) and (3)

PP 2019 Q26

Which of the following statements about credit cards are correct? (50%)

 

(1) They have a pre-approved credit limit.

(2) They have a payment due date.

(3) There is a monthly minimum payment for the outstanding balance.

• (1) and (2) only

• (1) and (3) only

• (2) and (3) only

• (1), (2) and (3)

A

• A

• B

• C

• D