Assessment 3 - Budget and Borrowing Basics - August 22, 2024

Which type of credit allows the borrower to be loaned a certain amount of money for a set period of time and requires the borrower to repay the money by making a series of fixed payments?

(a)  

• Installment credit
• Collateralized credit

• Unsecured credit

• Revolving credit

Which of the following loan types is issued when the borrower promises an asset of equal or higher value for the loan?

• Pay day loan

• Peer-to-peer loan

• Collateralized loan

• Interest loan

Which of the following is the sum of a family's current assets minus the family's total liabilities?

• Net worth

• Liquid assets

• Variable expenses

• Budget

Which of the following credit scores are considered fair?

• 690 to 719

• 630 to 689

• Above 720

• Below 600

Which of the following best defines credit utilization?

• Whether bills or debts have been paid in the past

• Length of time each account has been open

• Overall ability of how a borrower can handle all types of credit

• Percentage of available credit which has been borrowed

A credit score of 718 would be considered excellent.

• True

• False

Which item on a credit card statement shows the spending limit?

(a)  

• Account information

• Credit line
• Minimum payment due

• Account summary

Which of the following is an example of revolving credit?

• Auto loan

• Mortgage

• Student loan

• Credit card

Which of the following requires the borrower to offer a securement to the lender in case they do not repay the loan?

• Collateral

• Credit card

• Paycheck

• Character

Which of the following types of interest fluctuates over time as the market interest rates change?

(a)  

• Fixed

• Irregular

• Variable
• Annual