Money, Financial Institution & Credit Quiz

What is the main difference between a bank and a credit union?

• Banks only provide services to their members.

• Credit unions are owned and controlled by their members.

• Banks offer higher interest rates on deposits.

• Credit unions charge higher fees than banks.

Which financial institution typically charges the highest interest rates on loans?

• Credit Unions

• Title Pawn Lenders

• Banks

• Payday Loan Companies

What is collateral in the context of a title pawn loan?

• A type of loan offered by banks

• A type of interest rate

• An item of value owned by the borrower

• A fee charged by the lender

What is the difference between interest rate and APR?

• Interest rates are on all loans and APRs are only on mortgages

• The APR rate reflects down payments made on the item

• Interest rate is the stated rate for a loan but APR includes any fees or charges for the loan

• APRs are associated with loans from Title Pawn companies and Pay Day Loans.

What is a key advantage of using cash as a payment method?

• It can be easily replaced if lost.

• It is universally accepted and familiar.

• It offers consumer protection.

• It allows for online transactions.

What is a potential disadvantage of using prepaid cards?

• They have no fees

• They can be used for partial payments

• They may be limited in usage

• They are safer than cash

Karen is looking to buy gas. She notices that gas on exit 16 costs $3.59 a gallon. Gas at exit 22 costs $3.79 per gallon. But gas on Bemiss Road costs $3.50 a gallon. Which function of money does this represent?

• Karen is using the dollar as a medium of exchange because she is planning to buy gas.

• Karen is using the dollar as a unit of account because she is comparing how much the gas will cost her from the various stations.

• Karen is using the dollar as a store of value because she bought gas for her car.

• Karen is using the dollar as acceptability because all the gas stations will take dollar bills.

What is a key feature of a fixed-rate mortgage?

• It is not amortized

• The interest rate remains constant

• It has no principal payments

• The interest rate changes over time

What is the role of credit reporting agencies?

• To offer loans to consumers

• To report credit scores and histories

• To set interest rates for loans

• To provide financial advice

What is a common feature of payday loans?

• Low interest rates

• Long repayment terms

• High fees and interest rates

• Membership requirements