Quiz 2 2016: Credit Cards, Credit Reports, Credit Scores And Paying For College

17 Questions | Total Attempts: 108

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Credit Card Quizzes & Trivia

Questions and Answers
  • 1. 
    SELECT TWO ANSWERS.  The two most important factors in determining your credit score are:  
    • A. 

      Amounts owed

    • B. 

      Length of credit history

    • C. 

      Types of credit used

    • D. 

      Payment history

  • 2. 
    The higher interest rate (APR) that most credit card companies charge to a cardholder after a late payment: 
    • A. 

      Balance transfer APR

    • B. 

      Penalty APR

    • C. 

      Penalty fee

    • D. 

      Cashback reward APR

    • E. 

      Purchases APR

  • 3. 
    True or False.  The "net price" (your out-of-pocket expenses) for a college education is often significantly LESS than the "sticker price" due to financial aid provided by the college to reduce the cost to those with the greatest financial need.  
    • A. 

      True

    • B. 

      False

  • 4. 
    Which of the following factors should be considered when selecting a college?
    • A. 

      The "net price" of the college/university

    • B. 

      Graduation rates

    • C. 

      Whether college offers the field of study you are interested in

    • D. 

      Quality of the student body based on test scores, GPA and selectivity of admissions

    • E. 

      All of the above

  • 5. 
    What is the best advice you can give a friend about using a credit card?
    • A. 

      Pay the minimum payment each month on time

    • B. 

      Pay the balance in full every month on time

    • C. 

      Use your credit card to take out cash from ATM instead of your debit card since it is cheaper

    • D. 

      Be sure to borrow up to your credit limit as it will help your credit score

  • 6. 
    Which of these organizations can see your credit report?
    • A. 

      Lenders you are seeking to borrow from

    • B. 

      Utility companies

    • C. 

      Employers or prospective employers

    • D. 

      Landlord whose apartment you want to rent

    • E. 

      All of the above

  • 7. 
    Jasmine has credit score of 750 and Bill's credit score is 550.  They are each seeking an auto loan of $10,000.  Which statement below is TRUE?
    • A. 

      Bill and Jasmine will likely have the same interest rate as banks are forbidden to offer different interest rates on an auto loan.

    • B. 

      Since Bill has a lower credit score, he will likely pay a lower interest rate on the loan.

    • C. 

      Neither Bill nor Jasmine are likely to be approved for an auto loan given their low credit scores.

    • D. 

      Since Jasmine has a higher credit score she is likely to pay a lower interest rate.

  • 8. 
    Which of the following is NOT an example of credit?
    • A. 

      Home mortgage

    • B. 

      Auto loan

    • C. 

      Student loan

    • D. 

      Debit card

  • 9. 
    Select ALL the answers that apply.  Which of the following represent "free money" sources that can help you pay for college that never need to be repaid?  
    • A. 

      Federal student loans

    • B. 

      Pell Grants

    • C. 

      Private loans

    • D. 

      Other grants provided by the college/university

    • E. 

      College scholarships

  • 10. 
    In order to qualify for financial aid, prospective college students must file a:  
    • A. 

      Credit Card application

    • B. 

      FAFSA

    • C. 

      Credit Report

    • D. 

      Magna Carta

  • 11. 
    The gains from an investment in a company's STOCK that trades on a public exchange come from:
    • A. 

      Dividend and share price appreciation (rise in the stock price)

    • B. 

      Return of principal

    • C. 

      Dividend

    • D. 

      Decline in share price

  • 12. 
    Which of the items below is NOT a rule for creating wealth for the long-term?
    • A. 

      Start investing early

    • B. 

      Invest over time and don't try and time the market

    • C. 

      Invest all of your money in a bank savings account

    • D. 

      Diversify your investments

  • 13. 
    Through diversification, an investor is seeking to achieve stock market returns with lower risk. Which of the following investments would provide an investor with diversification?
    • A. 

      Investing in a single company’s stock

    • B. 

      Investing in a single company’s bonds

    • C. 

      Putting your money in a savings account

    • D. 

      Buying an S&P500 index fund

  • 14. 
    InvestmentPurchase PriceCurrent PriceReturn (%age)Apple$100$110?????Facebook$70$80????S&P500$200$210????You have three stocks that you bought earlier this year.  You are looking at their current prices and curious as to how the stocks have performed relative to each other.  You are using their percentage return as your measurement tool.  Rank order the stocks from HIGHEST return to LOWEST return.  Remember to calculate the percentage return for each stock to arrive at your answer.  WebRep currentVote  noRatingnoWeight           
    • A. 

      Apple, Facebook and S&P500 all had the same percentage return

    • B. 

      Apple, Facebook, S&P500

    • C. 

      Facebook, S&P500, Apple

    • D. 

      Facebook, Apple and S&P500

  • 15. 
    Your friend asks you how he can increase his credit score.  What is the best advice that you can give him?
    • A. 

      Make on-time payments on all of your loans (credit cards, student loans, auto loans)

    • B. 

      Apply for more credit cards

    • C. 

      Take out a student loan

    • D. 

      Miss a few payments on your loans

  • 16. 
    Recalling the “glass of water” video, if you have a $10,000 credit card balance and you pay only the minimum monthly payment, you can expect which of the following:
    • A. 

      The credit card balance will be paid off within 10 years.

    • B. 

      By paying the minimum monthly payment required by the credit card company, you are making the best decision because you will have more money each month to spend on other things.

    • C. 

      Almost all of your monthly payment will be interest and it will take many decades to pay off the credit card. Over the next 40 years you will pay over $60,000 to the credit card company before you even pay back the original $10,000.

    • D. 

      The principal balance on the credit card (the $10,000 balance) will decline very quickly, freeing up credit on the card to buy other things.

  • 17. 
    Which of the following describes the total PROFIT you can earn from a business.
    • A. 

      The total costs minus the total revenue, or sales.

    • B. 

      The number of units you sell multiplied by the price per unit, minus the total costs.

    • C. 

      The total revenue, or sales, divided by the number of units you sell.

    • D. 

      The amount of money investors give you to start your business.

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