How is a secured credit card different from the far more typical unsecured credit card?

It requires the borrower put down a deposit to create their credit limit

Which student is most likely to have the highest credit score?

3 cards paid in full monthly, recently applied for a new line of credit

Your insurance has $500 deductible, $200/mo premium, $20000 coverage limit. How much is paid for a $1500 claim

You pay $500, insurance pays $1000

The following are added expenses you should be aware of when ensuring you have enough aid to cover total costs, EXCEPT…

Fees associated with filling out the FAFSA

Why should a high school senior who has already completed the FAFSA still apply for scholarships as well?

Scholarships are “free money” that won’t need to be repaid

How is a Student Aid Report (SAR) different from a financial aid offer?

SAR is based on FAFSA responses, fin. aid offer is custom for each college

Why is it important to check your credit report regularly?

To identify potential errors or fraudulent activity

Struggling to pay off excess debt can lead to all of these consequences, EXCEPT…

Being fired from your job if your employer finds out you have too much debt

Which of the following statements about wages and household American debt is true?

Wages have increased less than prices, and debt has increased

Pipo receives a financial aid package from Bigtown University. What does she need to do next?

Decide which parts of the offer to accept, sign any promissory notes

What does it mean for student aid to be merit-based?

The aid is based on academic success or other accomplishments

What is the difference between a federal subsidized loan and a federal unsubsidized loan?

S-loans are interest-free until graduation, uns-loans are charged inter

All of the following are included on your Student Aid Report (SAR), EXCEPT…

Offers for grants and scholarships

If Nessa buys an umbrella policy of $2 million, she will …

Have $2mil extra liability cov over liability limits of auto/homeowner ins

If a potential lender checks your credit score and finds out it is above 750, which is the most likely outcome?

You will receive a loan with a low interest rate

Which statement accurately describes the key features of an observational study?

Observational study doesnt influence members, cant demonstrate causation

A financial aid package could contain each of the following, EXCEPT…

Schedule of first semester classes

Your credit utilization ratio is 25% and you open a new card w/o changing spending. Which correctly describes the ratio

Utilization will go down because they are increasing their credit limit

Theo reviews his credit report and decides to put a “red flag” on it. What does that mean?

New lenders will check Theo’s identity before approving a credit app

What is a health insurance deductible? The...

cumulative amount you pay for medical costs b4 your insurance pays anything

Event A is getting into an accident while driving, event B is the weather being foggy. What is P(A|B)?

The chances that you get into an accident if you know it is foggy

Which of the following statements about permutations and combinations is true?

Permutations are used in situations where order matters

Which of the following equations is true about college costs?

Net Price = Sticker Price - Grants - Scholarships

What is the purpose of a credit report?

To help lenders determine if you are a qualified candidate for credit

The FAFSA is used to determine your eligibility for…

Scholarships, grants, work study, and federal loans

Which of the following actions would be included in your credit report?

You made your student loan payment on time

A copay is a fixed amount you pay when receiving medical care

List these amounts in order from least to greatest:

Copay, deductible, out-of-pocket maximum

. Which is the strongest piece of advice to raise a credit score?

Pay your credit card bill on time each month

The premium and the deductible for your renters insurance policy have an inverse relationship. What does that mean?

If you pay a higher premium, you will receive a lower deductible

Car insurance collision coverage deductible of $1,500, coverage limit of $25,000. Accident claim of $5750, who pays?

You pay $1,500; the insurance pays $4,250

Which of the following is true about how frequently you should file the FAFSA?

You need to file the FAFSA every year that you attend college

Why are you advised to file your FAFSA as early as possible?

Aids awarded 1st come, 1st served, ur more likely 2 get grants/scholarships

Which two terms referring to the college financial aid process mean basically the same thing?

Sticker price // Cost of attendance

Which of the following options should you choose first to pay for the first year of college?

A $1,500 scholarship from your father’s employer

Which of the following people is likely to have the LOWEST auto insurance premium?

Celine: 26-year-old with a cheap car and no tickets

All of the following statements about predatory lending are TRUE EXCEPT…

They have a federally-mandated maximum APR of 25%

All of the following are potential benefits of attending college EXCEPT…

Your employer is required to help you pay back your student loans

All of these are true about late credit card payments, EXCEPT…

They are an extremely rare occurrence among American credit cardholders

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Ch 8, 9, & 10

49 termsStudBud Administration32 plays

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Questions 49

Answers

1
How is a secured credit card different from the far more typical unsecured credit card?
It is the same as a debit card, drawing money directly from your checking
It has an interest rates far lower than those of a typical credit card
It requires the borrower put down a deposit to create their credit limit
It cant be used to shop online, as you have to sign for each purchase
2
A Verdict at trial awards $37500 when you have only $25000 bodily injury coverage. How much will be paid out of pocket?
$37,500
$100
$12,500
$25,000
3
Which term refers to the maximum amount your insurance policy will pay out for covered claims in a given year?
Deductible
Out-of-pocket maximum
Coverage limit
Premium
4
Which student is most likely to have the highest credit score?
3 cards paid in full monthly, recently applied for a new line of credit
never had a credit card and has over $10,000 in her savings account
3 credit cards with low balances and forgets which one needs payments
2 credit cards and they’re usually near their credit limit
5
Your insurance has $500 deductible, $200/mo premium, $20000 coverage limit. How much is paid for a $1500 claim
You pay $500, insurance pays $1000
You pay $0, insurance pays $1500
You pay $200, insurance pays $1300
You pay $0, insurance pays $500
6
The following are added expenses you should be aware of when ensuring you have enough aid to cover total costs, EXCEPT…
Textbooks and supplies
Fees associated with filling out the FAFSA
Costs of a living in a dorm room or renting off campus
An on-campus meal plan
7
Why should a high school senior who has already completed the FAFSA still apply for scholarships as well?
Scholarships are “free money” that won’t need to be repaid
Scholarships are much easier to qualify for than federal student loans
Scholarships almost always have a higher dollar amount than grants or loans
Scholarships are only offered by prestigious colleges, guarantee admission
8
How is a Student Aid Report (SAR) different from a financial aid offer?
SAR is for public colleges, financial aid offer is for private colleges
SAR comes from the state gov, financial aid offer comes from the fed gov
SAR inclds all types of financial spprt, fin. aid offer is fed loans only
SAR is based on FAFSA responses, fin. aid offer is custom for each college
9
Why is it important to check your credit report regularly?
To improve your credit score through frequent hard inquiries
To monitor the transactions on your credit card
To identify potential errors or fraudulent activity
2 automatically increase the credit limit on your revolving credit accounts
10
Struggling to pay off excess debt can lead to all of these consequences, EXCEPT…
Having purchases repossessed (home, vehicle) for failure to make payments
Developing health problems from the stress of carrying debt
Having your wages reduced by collectors on unpaid debts
Being fired from your job if your employer finds out you have too much debt
11
Which of the following statements about wages and household American debt is true?
Wages have increased proportional to prices, and debt has remained the same
Wages have increased less than prices, and debt has increased
Wages have increased more than prices, and debt has decreased
Wages and prices have remained the same, and debt has remained the same
12
A standard renters insurance policy will pay for each of the following claims EXCEPT…
Replacement of the renter’s TV damaged by lightning strike
Repairs to the renter’s furniture damaged when a pipe burst
A new roof for the building
A lawsuit from a guest injured at the renter’s home
13
Pipo receives a financial aid package from Bigtown University. What does she need to do next?
Complete the FAFSA for next year
Decide which parts of the offer to accept, sign any promissory notes
Accept the entire offer or risk losing her acceptance at Bigtown University
Register 4 classes so she'll know the cost of tuition, books, and supplies
14
What does it mean for student aid to be merit-based?
The aid is coming from the US military
The aid is available for multiple years, rather than just one
The aid is based on academic success or other accomplishments
The aid is based on household income
15
What is the difference between a federal subsidized loan and a federal unsubsidized loan?
S-loans are interest-free until graduation, uns-loans are charged inter
S-loans are charged interest daily, uns-loans are charged interest monthly
S-loans are given to parents, uns-loans are given to undergraduates
S-loans need to be repaid, unsubsidized loans do not need to be repaid
16
All of the following are included on your Student Aid Report (SAR), EXCEPT…
Offers for grants and scholarships
Directions on how to resolve issues with your FAFSA
A summary of your FAFSA answers
Your Expected Family Contribution
17
If Nessa buys an umbrella policy of $2 million, she will …
No longer need to buy separate auto or homeowners insurance
Use it to pay for unexpected health care expenses her family has
Pay $2 million in premiums over her lifetime
Have $2mil extra liability cov over liability limits of auto/homeowner ins
18
If a potential lender checks your credit score and finds out it is above 750, which is the most likely outcome?
You will receive a loan with a low interest rate
You will receive a loan with a low principal
You will be denied the loan
You will receive a loan with a high interest rate
19
Which statement accurately describes the key features of an observational study?
Observational study doesnt influence the members, can demonstrate causation
Observational study doesnt influence members, cant demonstrate causation
Observational study influences the members, it can't demonstrate causation
Observational study influences the members and can demonstrate causation.
20
A financial aid package could contain each of the following, EXCEPT…
Unsubsidized student loans being offered
Estimated total cost of attendance
Grants and scholarships provided directly from the college
Schedule of first semester classes
21
Your credit utilization ratio is 25% and you open a new card w/o changing spending. Which correctly describes the ratio
Utilization will go up because they are increasing their credit limit
Utilization will go up because they are increasing their number of cards
Utilization will go down because they are increasing their credit limit
Utilization will go down because they are increasing their number of cards
22
Theo reviews his credit report and decides to put a “red flag” on it. What does that mean?
Late payments will be removed from Theo’s credit report for a fee
Theo will not be able to open new lines of credit for at least 1 year
The credit bureau has 30 days to resolve any errors in Theo’s credit report
New lenders will check Theo’s identity before approving a credit app
23
You flip a coin & roll a 6-sided die. What is the theoretical probability you get tails on the coin OR a 6 on the die?
P(tails or 6) = 8/12 = 0.67
We wont know theoretical probability until weve conducted numerous trials
P(tails or 6) = 7/12 = 0.58
P(tails or 6) = 1/12 = 0.08
24
What is a health insurance deductible? The...
fixed amount you pay 4 every medical claim before insurance covers the rest
amount subtract from premiums as long as you don't make insurance claims
amount you deduct from your taxes due to having insurance coverage all year
cumulative amount you pay for medical costs b4 your insurance pays anything
25
Event A is getting into an accident while driving, event B is the weather being foggy. What is P(A|B)?
The chances that you get into an accident if you know it is foggy
The chances that you both get into an accident and it is foggy
The chances that it was foggy on a day when you had an accident
The chances that you get into an accident but that it is not foggy
26
Your car was damaged by a big hail storm. It costs $425 to repair. What type of coverage pays for the repair?
Collision coverage
Uninsured/underinsured coverage
Comprehensive coverage
Liability coverage
27
Which of the following statements about permutations and combinations is true?
Order elements are selected doesnt matter for permutations/combinations
Both permutations and combinations r used in situations where order matters
Combinations are used in situations where order matters
Permutations are used in situations where order matters
28
Which of the following equations is true about college costs?
Net Price = Sticker Price - Loans - Grants
Net Price = Sticker Price - Grants - Scholarships
Sticker Price = Net Price - Scholarships - Grants
Sticker Price = Net Price - Scholarships - Loans - Grants
29
What is the highest FICO credit score you can obtain?
650
1000
100
850
30
What is the purpose of a credit report?
To help lenders determine if you are a qualified candidate for credit
To compare the cost of different lines of credit
To prove that you are authorized to work in the United States
To provide a free tool for you to track your finances and budget
31
The FAFSA is used to determine your eligibility for…
Grants to study abroad
Scholarships, grants, work study, and federal loans
Free room and board
Private loans and merit-based scholarships
32
Which of the following actions would be included in your credit report?
You used your debit card at the grocery store
You made your student loan payment on time
You bought a $300 prepaid card
You checked your credit score on your bank’s mobile app
33
Insurance charge each insured individual premiums and use the collected money to pay claims. This concept is known as...
Comprehensive coverage
Underwriting
Risk management
Risk pooling
34
What is a copay?
A copay is when you pay off more than one medical bill at the same time
A copay is the amount you pay with your insurance company
A copay is a fixed amount you pay when receiving medical care
A copay is when two or more people contribute to a single medical bill
35
List these amounts in order from least to greatest:
Deductible, out-of-pocket maximum, copay
Copay, deductible, out-of-pocket maximum
Copay, out-of-pocket maximum, deductible
Deductible, copay, out-of-pocket maximum
36
. Which is the strongest piece of advice to raise a credit score?
Close as many credit card accounts as you can
Pay your credit card bill on time each month
Pay off your debts as slowly as possible
Open up a savings account
37
The premium and the deductible for your renters insurance policy have an inverse relationship. What does that mean?
If you pay a higher premium, insurance company will pay a higher deductible
If you pay a higher premium, it does not impact your deductible at all
If you pay a higher premium, you will receive a lower deductible
If you pay a higher premium, you will receive a higher deductible
38
Which of these parties is least interested in checking your credit score?
A college admissions office
A car dealership
An apartment leasing office
A future employer
39
Car insurance collision coverage deductible of $1,500, coverage limit of $25,000. Accident claim of $5750, who pays?
You pay $0; the insurance pays $5,750
You pay $1,500; the insurance pays $4,250
You pay $4,250; the insurance pays $1,500
You pay $5,750; the insurance pays $0
40
Which of the following is true about how frequently you should file the FAFSA?
You need to file the FAFSA once, before you start college
You need to file the FAFSA if you receive a tax refund
You need to file the FAFSA once, after graduation from college
You need to file the FAFSA every year that you attend college
41
Why are you advised to file your FAFSA as early as possible?
Colleges r likely to accept u because u took the initiative to file early
Aids awarded 1st come, 1st served, ur more likely 2 get grants/scholarships
U have 2 file your FAFSA b4 you can complete your federal income tax return
After a certain deadline, you are required to pay a fee to file your FAFSA
42
Which two terms referring to the college financial aid process mean basically the same thing?
Sticker price // Cost of attendance
FAFSA // Financial aid offer
Promissory note // Financial aid offer
Sticker price // Net price
43
All of these are factors that determine your health insurance premium costs EXCEPT:
Your deductible
Your prior medical history
Your coinsurance amount
Your plan type of HMO, PPO, EPO, or POS
44
Which of the following options should you choose first to pay for the first year of college?
A work-study job worth $500
A $2,000 subsidized federal loan
A $1,500 scholarship from your father’s employer
A $14,000 private student loan
45
Which of the following people is likely to have the LOWEST auto insurance premium?
Celine: 26-year-old with a cheap car and no tickets
Theo: 32 with an expensive car, 2 speeding tickets in the last year
Jared: 27-year-old with a cheap car and 1 texting-while-driving ticket
Mila: 25-year-old with an expensive car and no tickets
46
All of the following statements about predatory lending are TRUE EXCEPT…
They often occur in conjunction with home mortgages
They disproportionately affect communities of color
They have a federally-mandated maximum APR of 25%
They can come in many forms like high interest rates and excessive fees
47
All of the following are potential benefits of attending college EXCEPT…
College graduates are more likely to get a higher paying job
A majority of jobs require some college education
College grads r likely to work for an employer that offers health insurance
Your employer is required to help you pay back your student loans
48
Which of the following statements represents only items in a sample space that are contained in both subsets A and B?
P(A)
A ∩ B
A ∪ B
A’
49
All of these are true about late credit card payments, EXCEPT…
They can drop your credit score by as much as 100 points
They are an extremely rare occurrence among American credit cardholders
They are the largest factor in your overall credit score
They can stay on your credit report for up to 7 years

Ch 8, 9, & 10 Flashcards | StudBud