WorksheetsChapter 9 and Chapter 10 Review - Fall 25
Total questions: 46
Worksheet time: 23mins
Name
Class
Date
1.
Interest rates tend to increase when the economy is growing.
a)
True
b)
False
2.
The rate of interest that banks offer to their very best individual customers is called the prime rate.
a)
True
b)
False
3.
The time of repayment of a loan is expressed as a fraction of one year: 12 months, 52 weeks, or 360 days.
a)
True
b)
False
4.
To determine simple interest, multiply the number of payments by the amount of each payment and then subtract the principal.
a)
True
b)
False
5.
The average daily balance method often results in a lower finance charge than does the previous balance method.
a)
True
b)
False
6.
It is your responsibility to your creditors to limit spending to amounts that can be repaid according to the credit agreement.
a)
True
b)
False
7.
Rebates often serve to increase the cost of credit.
a)
True
b)
False
8.
An installment plan may require a down payment up front.
a)
True
b)
False
9.
Secured loans typically have higher interest rates than unsecured loans.
a)
True
b)
False
10.
To minimize the cost of credit, you should
a)
a. keep the number of credit accounts to a minimum.
b)
b. make minimum payments.
c)
c. carry more credit than you need.
d)
d. avoid credit incentive programs.
11.
A good rule of thumb is that purchases under _________ should not be charged but should be paid in cash.
a)
a. $50
b)
b. $25
c)
c. $10
d)
d. $5
12.
The difference between the total price paid and the cash price is the
a)
a. principal.
b)
b. annual percentage rate (APR).
c)
c. finance charge.
d)
d. down payment.
13.
The formula I = P × R × T is for computing
a)
a. annual percentage rate.
b)
b. compounded interest.
c)
c. costs of loans.
d)
d. simple interest.
14.
A trade-in is _________ the purchase price of merchandise to determine the principal of a loan.
a)
a. added to
b)
b. not considered in
c)
c. computed as a percentage of
d)
d. subtracted from
15.
Your credit limit minus the amount you already owe is called
a)
a. unused credit.
b)
b. deferred credit.
c)
c. interest.
d)
d. principal.
16.
Credit problems often arise after months and years of poor planning.
a)
True
b)
False
17.
The 20/10 Rule suggests that you limit the use of credit to no more than 20 percent of your yearly gross pay, with payments of no more than 10 percent of your monthly gross pay.
a)
True
b)
False
18.
A credit repair plan is a record of your debts and a strategy for repaying them off.
a)
True
b)
False
19.
Credit counseling services are typically free.
a)
True
b)
False
20.
To qualify for a debt consolidation loan, you must have some type of collateral that secures the payment of the debt.
a)
True
b)
False
21.
When you declare bankruptcy, you are said to be insolvent.
a)
True
b)
False
22.
When you declare bankruptcy, all of your debts are erased and you get a fresh start without carrying forward previous obligations.
a)
True
b)
False
23.
Discharged debts are debts that a person declaring bankruptcy no longer has to pay.
a)
True
b)
False
24.
Chapter 7 is a liquidation form of bankruptcy that wipes out most debts in exchange for giving up most assets.
a)
True
b)
False
25.
The purpose of Chapter 11 bankruptcy is to liquidate the company and pay off its creditors.
a)
True
b)
False
26.
Involuntary bankruptcy is the most common kind of bankruptcy.
a)
True
b)
False
27.
In many cases, persons declaring bankruptcy must give up most of their property to be sold to pay debts.
a)
True
b)
False
28.
Income taxes, child support, and alimony are examples of debts that are not discharged by bankruptcy.
a)
True
b)
False
29.
If you file for Chapter 7 bankruptcy, any cosigners you have are no longer obligated to repay the loans they cosigned.
a)
True
b)
False
30.
It is a good idea to get legal advice when considering filing for bankruptcy.
a)
True
b)
False
31.
Which of the following is commonly known as straight bankruptcy?
a)
a. involuntary bankruptcy
b)
b. Chapter 13 bankruptcy
c)
c. voluntary bankruptcy
d)
d. Chapter 7 bankruptcy
32.
If you file for Chapter 13 bankruptcy, the judgment remains on your credit record for _______ years.
a)
a. two
b)
b. seven
c)
c. six
d)
d. three
33.
The 20/10 Rule does not apply to
a)
a. closed-end credit.
b)
b. credit cards.
c)
c. mortgage loans for housing.
d)
d. open-end credit.
34.
When a debtor has reaffirmed a debt after a bankruptcy judgment, he or she has _______ days to change his or her mind about promising to repay.
a)
a. 60
b)
b. 30
c)
c. 120
d)
d. 90
35.
To repair a poor credit rating, you can
a)
a. threaten to sue.
b)
b. challenge incorrect information.
c)
c. obtain more credit cards.
d)
d. declare bankruptcy.
36.
Which of the following debts is not discharged by bankruptcy?
a)
a. student loans
b)
b. car loans
c)
c. medical bills
d)
d. credit card purchases
37.
The biggest cause of bankruptcy is
a)
a. medical expenses.
b)
b. job loss.
c)
c. divorce.
d)
d. poor financial planning.
38.
Under _______, debtors may keep most of their property but must submit a payment plan to the court.
a)
a. liquidation
b)
b. exemption
c)
c. reaffirmation
d)
d. reorganization
39.
Credit problems can arise from
a)
a. All of these choices are correct.
b)
b. impulse buying.
c)
c. careless budgeting.
d)
d. emergencies.
40.
When designing a credit payment plan, accounts with the ______ should be first priority.
a)
a. lowest minimum monthly payment
b)
b. highest interest rate
c)
c. lowest credit limit
d)
d. highest credit balance
41.
To be insolvent means that you are
a)
a. unable to finance your car.
b)
b. unable to pay your bills.
c)
c. unwilling to meet your financial responsibilities.
d)
d. unable to get more credit.
42.
Which of the following is one of the goals of bankruptcy laws in the United States?
a)
a. to make it very easy for people to get out of paying back their debts
b)
b. to give fair treatment to creditors competing for debtors' assets
c)
c. All of these choices are correct.
d)
d. to give relief to creditors who cannot pay their bills
43.
When a creditor asks the court to declare a debtor bankrupt, this action is known as ______ bankruptcy.
a)
a. voluntary
b)
b. Chapter 7
c)
c. involuntary
d)
d. Chapter 13
44.
Which of the following is a debt that would be discharged by bankruptcy?
a)
a. alimony
b)
b. income taxes
c)
c. child support
d)
d. loan payment
45.
Under _______, the court sells the debtor's assets and uses the proceeds to pay the debts.
a)
a. reaffirmation
b)
b. reorganization
c)
c. exemption
d)
d. liquidation
46.
Which of the following forms of bankruptcy is used for businesses?
a)
a. Chapter 11
b)
b. All of these choices are correct.
c)
c. Chapter 7
d)
d. Chapter 13
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