Financial Literacy Quiz Lecture 5 Flashcards

1

What is collateral in auto loans?

Credit score
Car itself
Interest rate
Income

2

What is a secured loan backed by?

Credit score
Interest rate
Assets
Income

3

What does debt to asset ratio measure?

Debt financing
Income stability
Investment risk
Credit score

4

How does credit card interest compound?

Monthly
Daily
Quarterly
Annually

5

Which is a short-term liability?

Credit card balance
Mortgage
Student loan
Auto loan

6

What is co-signing a loan?

Legal responsibility
Increasing credit
Sharing interest
Reducing fees

7

What increases with longer loan terms?

Interest paid
Monthly payment
Credit score
Debt ratio

8

What is an installment loan?

Variable term
Open credit
Regular payments
No interest

9

What is the total cost of ownership?

Interest only
Purchase price
All associated costs
Insurance only

10

What is a checking account considered?

Fixed
Unsecured
Liquid
Secured

11

Why borrow money according to the life-cycle model?

To increase debt
To buy luxury
To avoid taxes
To smooth consumption

12

What is a feature of secured loans?

High risk
Lower interest
Variable rate
No collateral

13

What affects the APR of a loan?

Loan term
Credit limit
Income level
Debt ratio

14

What is a common credit card fee?

Annual fee
Interest waiver
No fee
Cashback bonus

15

What is a credit card's main feature?

Fixed repayment
Low interest
High fees
Open-ended credit

Financial Literacy Quiz Lecture 5

Questions 15

Financial Literacy Quiz Lecture 5

Questions 15