Personal Finance Quiz

What is an Adjustable Rate Mortgage (ARM)?

• A mortgage with a fixed interest rate for the entire loan term

• A mortgage with an interest rate that changes periodically

• A mortgage with a variable interest rate that can only be adjusted once

• A mortgage with an interest rate that is adjusted annually

What is a 401(k) Loan?

• A loan taken from a retirement savings account

• A loan taken from a bank for retirement purposes

• A loan taken from a credit union for retirement purposes

• A loan taken from a family member for retirement purposes

What is Amortization?

• The process of paying off debt in equal installments

• The process of paying off debt in irregular installments

• The process of paying off debt in decreasing installments

• The process of paying off debt in increasing installments

What does APR stand for?

• Annual Percentage Rate

• Average Percentage Rate

• Adjusted Percentage Rate

• Accrued Percentage Rate

What is a Balance Transfer?

• Transferring debt from one credit card to another

• Transferring money from a savings account to a checking account

• Transferring money from a checking account to a savings account

• Transferring money from a retirement account to a savings account

What is Collateral?

• Something valuable that the lender can take as payment if you can't repay a secured loan

• Something valuable that the lender can take as payment if you can't repay an unsecured loan

• Something valuable that the lender can take as payment if you can't repay a mortgage

• Something valuable that the lender can take as payment if you can't repay a credit card debt

What is a Consolidation Loan?

• A loan that combines multiple education loans into a single loan

• A loan that combines multiple credit card debts into a single loan

• A loan that combines multiple mortgage loans into a single loan

• A loan that combines multiple personal loans into a single loan

What is a Cosigner?

• Someone who legally agrees to take responsibility for a person's debt if they cannot repay it

• Someone who legally agrees to take responsibility for a person's debt if they can repay it

• Someone who legally agrees to take responsibility for a person's debt if they have a good credit score

• Someone who legally agrees to take responsibility for a person's debt if they have a bad credit score

What is a Credit Limit?

• The maximum amount that may be borrowed on a credit card

• The maximum amount that may be borrowed from a bank

• The maximum amount that may be borrowed from a credit union

• The maximum amount that may be borrowed from a family member

What is a Credit Score?

• A three-digit number based on an individual's credit history

• A three-digit number based on an individual's income

• A three-digit number based on an individual's age

• A three-digit number based on an individual's education level