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Test Description: This is a review for the WISE test
Instructions: Answer all questions to get your test result.
1) When a person brings an item to a pawnshop to obtain cash, the transaction is considered
A
a sales agreement
B
an unsecured loan
C
a collateralilzed loan
D
a custodial payment
2) To qualify for a Federal Housing Administration (FHA) loan, a person must generally
A
have at least a high school diploma
B
have one-quarter of the cost of the home for a down-payment
C
fulfill income guidelines
D
provide two individuals to co-sign the loan
3) When a person declares bankruptcy that will appear on the person's credit report
A
for a 3 year period
B
until the person repays all debts owed
C
until the person is able to receive a new credit card
D
for a 10 year period
4) Which of the following is considered to be open-end credit?
A
a mortgage
B
installment loans
C
department store charge cards
D
a car loan
5) A person has 3 credit cards with very large outstanding balances and is unable to make payments on any of them. Which action should the person take?
A
Notify the credit card companies in order to negotiate a new payment plan.
B
File for bankruptcy in order to maintain ones current credit score.
C
Contact the Internal Revenue Service in order to avoid paying income tax this year.
D
Notify a credit reporting agency in order to avoid a late fee.
6) What is meant by uncollateralized loan?
A
A loan taken out on a life insurance policy
B
A personal loan without assets to cover the loan amount.
C
A loan not backed by a co-signer who agrees to cover the amount of the loan.
D
A home equity loan
7) When a borrower fails to repay a loan and there is a co-signer on the loan, the most likely result will be
A
The co-signer has the opportunity to renegotiate the loan.
B
Only the co-signer's credit report will show that there has been a default on the loan.
C
The co-signer will be held responsible for the repayment of the entire loan plus fees or penalties.
D
The co-signer will be held responsible for one-half the repayment of the loan.
8) You can continue to charge purchases on your credit card when:
A
You can afford the monthly payments
B
Your payments are always received by the due date.
C
The amount you owe on the card is below your credit limit.
D
The amount you owe on this credit card is above your credit limit.
9) Judy and Phil had a joint VISA credit card while they were married. They are now divorced. Who is responsible for the balance owed on the VISA card?
A
The credit card company
B
Phil since he has a full time job.
C
Neither Phil nor Judy because they are now divorced.
D
Both Judy and Phil
10) Which factor would most likely lead to an increase in the interest rate on a person's credit card?
A
Number of purchases
B
Total amount charged
C
Number of cash advances
D
Late payments
*select an answer for all questions
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