Financial Concepts Overview PART 1

What does 'Character' refer to in the 3 C's of Credit?

• A) The borrower's ability to repay the loan

• B) Assets pledged by the borrower

• C) The honesty and reliability of a borrower

• D) The interest rate of the loan

Fill in the blank: A 401(k) is a defined contribution retirement plan that allows employees to save a portion of their paycheck before ______ are deducted.

• taxes

• fees

• deposits

• loans

What is an Annual Deductible?

• The total cost of borrowing

• The amount an insured person must pay out-of-pocket before insurance starts

• A personal loan for purchasing a vehicle

• The borrower's ability to repay the loan

Fill in the blank: APR stands for ______.

• Annual Percentage Rate

• Annual Payment Rate

• Actual Percentage Rate

• Annual Profit Rate

What is a Car Loan?

• A loan for purchasing a house

• A personal loan specifically for purchasing a vehicle

• A loan for education expenses

• A loan for starting a business

Fill in the blank: Understanding ______ is essential for making informed borrowing decisions.

• APR

• APY

• ROI

• EMI

Cash Loan is a type of

• A type of secured loan

• A type of unsecured loan

• A mortgage loan

• A student loan

Collision Insurance covers

• Damages from collision with another vehicle or object

• Theft protection

• Vandalism protection

• Liability for injuries

The purpose of Disability Insurance is to

• To provide income in the event of disability.

• To cover property and assets against loss.

• To fund education expenses.

• To pay for routine health care services.

Certificate of Deposit (CD) is

• A short-term loan provided by banks.

• A savings account with flexible interest rates.

• A time deposit with a fixed interest rate and maturity date offered by banks.

• A type of investment bond.