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- 1. Multiple ChoiceWhich statement best describes the basic relationship between savers and borrowers at a traditional bank?The bank pays interest to the savers and gives loans at the SAME interest rates to the borrowers, so it all balances out.The bank pays interest to the savers and gives loans at a HIGHER interest rate, so that the bank makes money.The bank pays interest to the savers and gives loans at a LOWER interest rate, so the bank makes money.The bank makes no money from savers or borrowers.
- 2. Multiple ChoiceWhich of the following represent secured debt?Auto loanStudent loanCredit cardNone of the above
- 3. Multiple ChoiceYou can typically reduce your loan costs by making a large___________.InterestDown PaymentTerm
- 4. Multiple ChoiceThe ___________________ rate refers to how much the bank is going to charge, yearly, for your loan.InterestDown paymentTerm
- 5. Multiple ChoicePretend you take out a 30-year fixed rate mortgage for $250,000. Which of these statements will be true?The amount of payment you owe every month will be the same.The amount of interest you pay every month will be the same.The amount of principal you pay every month will be the same.You are not allowed to pay more than the amount due every month.
- 6. Multiple ChoiceWhich of the following represent benefits of an installment loan?Do not require a credit check, so they're easy to obtain.Allow you to make many small purchases, as you need them, as long as you're under your credit limit.Usually have a fixed interest rate, so you know exactly how much you'll owe each month.Cannot be used to pay your college tuition bill.
- 7. Multiple ChoiceFor a student loan, you want the interest rate to be___________.LowHigh
- 8. Multiple ChoiceWhich of these does NOT represent a type of credit?A certificate of deposit (CD)A Federal student loanA credit cardA mortgage
- 9. Multiple ChoiceA short _______________ will likely mean higher monthly payments but lower overall costs.InterestDown paymentTerm
- 10. Multiple ChoiceTrue or False: To avoid appearing biased, a bank or other lender must offer the same interest rate to all of its borrowers.TrueFalse
- 11. Multiple ChoiceFor a credit card, you want the interest rate to be ____________.LowHigh
- 12. Multiple ChoiceFor a savings account, you want the interest rate to be_____________.LowHigh
- 13. Multiple ChoiceWhen using a credit card, you are really getting a short-term loan to allow you to purchase an item now which you can pay for later.TrueFalse
- Answer choicesTagsAnswer choicesTags