WorksheetsAssessment - Budgeting and Borrowing - 6th Block - 5/28/24
Total questions: 60
Worksheet time: 2hrs 30mins
Which of the following is also known as social lending or crowd lending?
Title loans
Pay day lending
Peer-to-peer lending
Collateral
Which of the following is NOT a way to reduce the borrowing cost of a loan?
Shopping around for a low interest rate
Shortening the length of term
Putting down a higher down payment
Making a lower principal payment
Which of the following types of loan is issued when the borrower promises an asset of equal or higher value for the loan?
Interest loan
Collateralized loan
Pay day loan
Peer-to-peer loan
Which of the following credit scores are considered fair?
630 to 689
Above 720
690 to 719
Below 600
Which of the following is an example of revolving credit?
Mortgage
Credit card
Auto loan
Student loan
In order to assess an individual’s credit worthiness, five factors are reviewed. Which of the following factors evaluates a person’s income and household expenses?
Collateral
Condition
Character
Capacity
Which of the following is a short-term, high-interest loan designed to bridge the gap from one paycheck to the next?
Personal loan
Student loan
Payday loan
Mortgage
Which of the following is the annual or yearly rate charged for borrowing or earning through an investment?
Annual percentage rate
Interest rate
Variable interest rate
Fixed interest rate
Which of the following best describes higher down payment?
Initial payment includes a higher amount of money being paid up front so the amount borrowed is less
Money is agreed to be paid back and only goes towards the lender
Paying off debt with a fixed payment plan over time
Paying off debt with a fixed payment plan over time
Which of the following is the gap between when the credit card’s billing cycle closes and when the bill becomes due?
Cash advance
Grace period
Late payments
Prepayment penalty
Which of the following types of interest fluctuates over time as the market interest rates change?
Variable
Fixed
Irregular
Annual
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
Character
Paycheck
Which of the following types of credit is issued and supported by a borrower's reliability, rather than the value of an asset?
Collateralized credit
Installment credit
Unsecured credit
Revolving credit
Which of the following is the issue of money, goods or services to an individual or entity with the expectation of future payments?
Credit
Interest
Debit
Revolving credit
Thelma wants to buy a new laptop from BestBuy but doesn't have enough savings. Which of the following involves a lending institution allowing her to borrow money and then pay back some or all of it each month?
Credit card
Payday loan
Income statement
Interest
Jonatan took a loan to buy a car and used the car as collateral. What type of loan did he take?
Unsecured Loan
Secured Loan
A credit score is a three-digit numerical rating that reflects how likely you are to fail at paying your debts
A five-digit numerical rating that reflects how likely you are to repay your debt.
A three-digit numerical rating that reflects how likely you are to repay your debt.
A credit score is a five-digit numerical rating that reflects how likely you are to fail at paying your debts
Lisa applied for a loan and was told her credit score of 800 is considered _____
Poor
Fair
Good
Amazing
True
False
Why is it important to establish positive credit history?
Higher credit scores result in lower interest rates on loans
You are more likely to be offered a loan by a bank
Positive credit history results in higher credit scores
All of the above
What is important in establishing good credit?
Making payments on time
Being late on payments
Spending 100% of your credit limit
Missing a payment
A person who takes and uses a sum of money under an agreement to pay it back?
Borrower
Lender
Which information would NOT appear on your credit report?
Credit Card balance
Car loan
Mortgage
Debit Card balance
A Credit Score is a:
A method of tracking money
A measure of someone's credit risk
a number that gives you rewards if you stay under
report of credit history
Loan Officers will check the following to assess a borrower's credit worthiness:
Credit Report and Credit History
GPA and Transcripts
Parents Income and Net Worth
All of the above
What are the 3 Credit Reporting Agencies in the U.S.?
Equifax, Expedia and Trans America
Equilibrium, Experience, and Trans Continental
Equifax, Experian, and Trans Union
Equality, Expatriot, and Transformation
FICO stands for:
Freeway Incident Car Overturned
Fair Intrinsic Corporation
Fair Isaac Corporation
Fred Isaac Company
What does the 30% represent in the 50-30-20 Rule of Budgeting?
Bills
Savings
Wants
Needs
How does the 50/30/20 rule of thumb for budgeting allocate your income?
50% Needs, 30% Wants, 20% Savings & Debt Repayment
50% Wants, 30% Needs, 20% Savings & Debt Repayment
50% Savings & Debt Repayment, 30% Wants, 20% Needs
50% Needs, 30% Savings & Debt Repayment, 20% Wants
Which of the following is an example of buying something you NEED?
"I want to replace something that is no longer working."
"I want to impress someone/ change how they feel about me."
"I'm feeling down, and I need to boost my spirits."
"I don't want to miss out on these deals during the sale!"
Halimatou has a $25 budget to spend at the store. Which items should she buy first before she buys anything else?
soda, bottled water, t-bone steak
bread, candy, chips, eggs
milk, ice cream, pasta, pineapple juice
eggs, apples, soap, toothpaste
The amount of money you bring home on your paycheck after taxes and other deductions are taken out of your gross pay. This is called ________________________.
Taxable pay or Net expense
Net pay or Taxable pay
Take home pay or Net income
Bill money
Cierra, an engineering student, bought a high end scientific calculator
Need
Want
Octavya brings home $2,500 a month. She spends $500 on food, and $850 on housing. She pays $150 on her credit card bill, puts $500 in savings and $300 goes into her emergency fund. Her financial goals represent what percentage of her income?
92%
54%
38%
50%
Anitra brings home $2,700 a month. She spends $100 on clothing, $150 on eating out, $150 on cable, $400 on spa treatments and $150 on utilities. Her wants represent what percentage of her income?
35%
10%
30%
55%
Nnagbe is a college freshman who wants to purchase a car for transportation. Her campus dorm is just down the street from Walmart where she works two days a week.
Need
Want
A great rule of thumb is to spend most of your take home pay on wants and then spend approximately 10% on your needs. It is important to always spend your money on yourself first.
False
True
30% of $5,000 is $ ___
$150,000
$1,500
1,666
$6,500
Which of the following represents a need for Carla?
Carla's first day of school is Monday and she need to go to the hair salon.
Carla's first day of school is Monday and she need to have a new car.
Carla's first day of school is Monday and she need to have her school supplies.
Carla's first day of school is Monday and she need to have a bag of snacks.
Credit Mix is __________________.
the types of accounts that make up a consumer's credit report.
10% of a consumer's FICO score.
the various types of credit a consumer may have such as credit cards, student loans and automobile loan.
defined by all the responses given (all answer choices are correct).
Companies use a mathematical formula to create your ______. Its an indication to lenders, a person's capacity to repay debt.
Credit score
Credit report
Credit history
Credit bureau
_________ is a request by an institution for credit information from a credit reporting agency.
Credit score
Credit inquiry
Credit card
Credit summary
Zandra brings home $1,500 a month. She spends $300 on food, and $750 on housing. Her needs represent what percentage of her income?
70%
50%
75%
30%
Michelle brings home $2,700 a month. She spends $200 on eating out, $250 on arts and crafts, $400 on hair and nails and $150 on MLGW. Her wants represent what percentage of her income?
31%
37%
30%
50%
65% of $3,400 is _______.
$5,230
$2,210
$1,911
$1,800
Paying your mortgage would be an example of __________ and a __________ expense.
cash inflow - fixed
cash outflow - fixed
cash inflow - variable
cash outflow - variable
The Boone family has $97,000 in assets and $29,000 in liabilities. What is their net worth?
$67,000
$68,000
$125,000
$135,000
A Netflix subscription is a(an) ________________.
fixed expense
variable expense
income
liability
What are variable expenses?
Irregular expenses that change from week to week or month to month
The amount of money in your bank account
Costs that do not fluctuate from week to week or month to month
The amount of cash in your purse/wallet
What are fixed expenses?
Irregular expenses that change from week to week or month to month
The changing cost of products.
Those essential items that you need.
Expenses that stay the same from week to week or month to month
If Jefrin's NET WORTH is $50,000. Which statement is correct?
Jefrin has $50,000 in assets and $50,000 in liabilities.
Jefrin has $100,000 in assets and $50,000 in liabilities.
Jefrin has $50,000 in assets and $50,000 liabilities.
Jefrin has $50,000 in assets and $100,000 in liabilities.
What is the equation for calculating net worth?
Net worth + Assets = Liabilities
Assets - Liabilities = Net worth
Assets + Liabilities = Net worth
There is no calculation for net worth
Mrs. Cathey enjoys collecting art pieces. Her collection is now worth $15,800. This is best described as ________.
expenses
income
liabilities
assets
Which of the following is NOT an asset?
Cash in the bank
Real estate
Car payment
Fine jewelry
Which of the following represents a liability?
You sold your prize artwork to a gallery.
You have to repay your best friend $750 over the next 7 months.
You have to buy groceries this weekend.
Your hair stylist owes you a complimentary cut and style.
