Chapter 6 Financial Literacy

A ___________ should be considered a lender of last resort.

• bank.

• payday lender.

• credit union.

• All of the choices are correct.

Members of alternative financial systems include:

• check cashers.

• pawn shops.

• payday lenders.

• All of these answer choices are correct.

Money set aside for unforeseen circumstances is often referred to as having a(n):

• emergency fund.

• savings account.

• bank account.

• loan.

To receive a good rate, a good credit score is required in which of the following situations?

• Auto loan at bank.

• Personal loan at bank.

• Credit Card.

• All of the answer choices are correct.

What loan type is backed by collateral?

• Secured

• Unsecured

• Payday

• Cash Advance

With what type of loan does the borrower receive the full amount of the loan up front in a single lump sum?

• Personal loan.

• Payday loan.

• Installment loan.

• Cash advance.

What type of lending allows a borrower and lender to come together via the Internet using a lending site?

• Peer-to-peer (P2P)

• Payday loan

• Line of credit

• Deposit advance

Which loan has no interest until 6 months after graduation as long as the student is enrolled half-time?

• Federal subsidized loan

• Federal unsubsidized loan

• PLUS loan

• Private loan

Which loan allows for consolidation of federal student loans into one loan?

• Federal subsidized loan

• Federal unsubsidized loan

• PLUS loan

• Direct consolidation loan

What asset type tends to go down in value?

• Use.

• Long-term.

• Short-term.

• Liquid.