WorksheetsChapters 9-10 Test - Fall 2025 Ramsey (Fixed)
Total questions: 48
Worksheet time: 24mins
Name
Class
Date
1.
True or False. Both creditors and debtors have responsibilities to each other.
a)
True
b)
False
2.
True or False. Consumers do not have the right to opt out of a credit arrangement because of changes in credit policies.
a)
True
b)
False
3.
True or False. If an online retailer also has a physical “bricks-and-mortar” store, it is probably safer than a merchant that exists only in cyberspace.
a)
True
b)
False
4.
True or False. Do not increase spending when your income increases; instead, use the extra income to pay off credit card debt or put it into savings.
a)
True
b)
False
5.
True or False. A bad debt is a credit account that is overdue but probably still collectible.
a)
True
b)
False
6.
True or False. In most credit transactions, the standard practice is to use 360 as the number of days in a year for computing simple interest.
a)
True
b)
False
7.
True or False. The annual percentage rate, or APR, is the true rate of interest paid over the life of an installment loan.
a)
True
b)
False
8.
True or False. When creditors use the average daily balance method, they impose the finance charge on the entire amount owed from the previous month.
a)
True
b)
False
9.
True or False. It is vital that you follow the 20/10 Rule when you take out a mortgage loan.
a)
True
b)
False
10.
True or False. With a debt management plan, a consumer makes a single monthly payment to a credit counseling organization that distributes funds to creditors.
a)
True
b)
False
11.
Which of the following is most likely to be an impulse purchase?
a)
a house.
b)
a home stereo system.
c)
a new car.
d)
a candy bar.
12.
Which of the following is NOT an example of a creditors’ responsibility to a consumer?
a)
making credit records available to consumers
b)
honestly representing goods and services, including potential disadvantages
c)
contacting the consumer each month to verify that the bill is correct
d)
setting reasonable guidelines for credit use
13.
A scam that uses online pop-up messages or e-mail to deceive you into disclosing personal information is called
a)
encrypting.
b)
phreaking.
c)
phattening.
d)
phishing.
14.
Secure websites have a small lock icon that means the information you enter will be
a)
used only for the intended purpose.
b)
encrypted.
c)
shared only with other secure websites.
d)
all of the above.
15.
You will receive a payback in the form of points that can be redeemed for merchandise if your credit account has a
a)
good customer program.
b)
rewards program.
c)
profit-sharing plan.
d)
rebate program.
16.
One way to minimize the cost of credit is to
a)
carry at least five or six credit cards.
b)
make less than the minimum monthly payment.
c)
pay cash for small purchases.
d)
apply for more credit than you need.
17.
When you buy an item that serves as collateral, you are taking out a(n)
a)
secured loan.
b)
unsecured loan.
c)
variable-rate loan.
d)
microloan.
18.
The unpaid portion of a loan is called
a)
principal.
b)
collateral.
c)
equity.
d)
rate.
19.
Money paid for the use of someone else’s money is called
a)
assets.
b)
interest.
c)
collateral.
d)
dividends.
20.
When creditors apply the finance charge only to the amount owed after you’ve paid your bill each month, they are using the
a)
adjusted balance method.
b)
previous balance method.
c)
minimum balance method.
d)
average daily balance method.
21.
Exercising good credit management means
a)
using credit for at least 80 percent of your purchases.
b)
always getting someone to cosign your loans.
c)
following an individual plan for using credit wisely.
d)
never using credit under any circumstances.
22.
All of the following are danger signs that you are overextending your credit except
a)
your credit score is rising.
b)
you often pay one credit card by using another credit card.
c)
you skip some payments in order to make other payments.
d)
your credit cards are all near the limit.
23.
With this type of program, a company negotiates with your creditors on your behalf to reduce the amount of debt you owe.
a)
debt management.
b)
debt consolidation.
c)
debt settlement.
d)
debt counseling.
24.
You should beware of any credit repair company that
a)
promises to remove negative information from your credit report.
b)
requires you to pay a fee before they act on your behalf.
c)
advises you to create a new credit identity.
d)
all of the above are true.
25.
A legal process where property used as collateral is sold to pay off a debt is called
a)
bankruptcy.
b)
defaulting.
c)
foreclosure.
d)
garnishment.
26.
When you have insufficient income and assets to pay your debts, you are said to be
a)
indigent.
b)
liquidated.
c)
unsecure.
d)
insolvent.
27.
This occurs when creditors file a petition with a court asking the court to declare you bankrupt.
a)
involuntary bankruptcy.
b)
repossession.
c)
foreclosure.
d)
voluntary bankruptcy.
28.
Which of the following is a reorganization form of bankruptcy for businesses?
a)
Chapter 11 bankruptcy
b)
involuntary bankruptcy
c)
Chapter 13 bankruptcy
d)
voluntary bankruptcy.
29.
Which of the following is the main advantage of Chapter 7 bankruptcy?
a)
it provides immediate debt relief
b)
debtors get to keep most of their property
c)
it is the easiest form of bankruptcy to qualify for
d)
it is better for the debtor in terms of reestablishing credit
30.
Which of the following would NOT be considered a disadvantage of bankruptcy?
a)
you may not qualify for liquidation
b)
cosigners must repay their loans
c)
some debts can be reaffirmed
d)
exempted assets are retained
31.
True or False. If you fail to make payments as agreed, a creditor can take you to court and win a judgment against you.
a)
True
b)
False
32.
True or False. In cases of credit card fraud, both the credit card holder’s liability and the merchant’s liability are limited to $50.
a)
True
b)
False
33.
True or False. Storing your credit card information on a merchant's website facilitates the shopping process and generally poses no security risk.
a)
True
b)
False
34.
True or False. Secured loans typically have higher interest rates than unsecured loans.
a)
True
b)
False
35.
True or False. Most borrowers find that the interest rates for loans go up faster during periods of rising prices than they go down during periods of falling prices.
a)
True
b)
False
36.
True or False. Simple interest is interest computed on the amount borrowed (or saved), plus compounding.
a)
True
b)
False
37.
True or False. Creditors are not required to disclose the amount of finance charges you will pay if you make only the minimum payments on your credit card debt.
a)
True
b)
False
38.
True or False. Credit problems usually happen quite suddenly.
a)
True
b)
False
39.
True or False. Generally, accounts with the highest interest rates should be your first priority in a credit payment plan.
a)
True
b)
False
40.
True or False. The majority of funding for credit counseling organizations comes from the federal government.
a)
True
b)
False
41.
True or False. Debt settlement programs are typically free and can reduce your debt by as much as 90 percent.
a)
True
b)
False
42.
True or False. 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
43.
True or False. Information on credit scams, as well as credit advice, is available on the Federal Trade Commission (FTC) website.
a)
True
b)
False
44.
True or False. In bankruptcy, most of a debtor’s assets will probably be used to repay unsecured debt.
a)
True
b)
False
45.
True or False. The use of gold and platinum credit cards almost always improves your credit rating, as it indicates that you have a high level of creditworthiness.
a)
True
b)
False
46.
I = ?, P = $50, R = 12%, T = 1 month (1/12)
(a)
47.
I = ?, P = $1,000, R = 18%, T = 24 months (24/12)
(a)
48.
I = ?, P = $600, R = 15%, T = 60 days (60/360)
(a)
100 %
