Personal Finance -Unit 6 (Part 2) Question Preview (ID: 42194)


Part 2. TEACHERS: click here for quick copy question ID numbers.

Edward wants to develop a positive credit history. How should he do this?
a) Maintain reasonable amounts of available credit
b) Have one type of credit account
c) Pay cash for the majority of purchases
d) Open credit accounts in his parents’ names

In which scenario should renters insurance be considered?
a) Don and Denise are landlords for several rental properties.
b) Zach and Leah have rented an apartment in an urban area.
c) Tim and Hanna are living with his parents.They are paying his parents rent during the time they are living in their home.
d) Steve and Teri have purchased a home in a rural area.

Which is not included in an individual’s credit report?
a) Current and past addresses
b) Bankruptcies and foreclosures
c) Account balances
d) Medical information

Which is a general rule when dealing with credit reports to minimize identity theft?
a) Report mistakes to only one credit reporting agency and they will inform the others.
b) Check each credit report at least once per year.
c) Wait 60 days before disputing any wrong information found in a credit report or on a credit card statement.
d) Keep credit reports in an easily accessible location, so information can be accessed if fraud occurs.

Eric has chosen Amanda to be the beneficiary of his life insurance policy. What does this mean for Amanda?
a) Amanda will receive any proceeds when Eric dies.
b) Amanda will receive a commission for selling Eric his life insurance policy.
c) Amanda is required to serve as the executor of Eric’s estate.
d) Amanda must pay the insurance premiums to keep the policy in effect.

Jake’s credit application has been declined because of his negative credit history. Which is most likely to be true?
a) Jake has applied for 4 credit cards and a car loan in the past 6 weeks.
b) Jake holds 2 store credit cards, a bank credit card, a car loan, and a mortgage.
c) Jake pays his bills consistently and on time.
d) Jake has received 3 traffic tickets in the past 2 months.

Leah is trying to explain the difference between open-end and closed-end credit to her roommate. Which should she include in her description of closed-end credit?
a) Interest rates vary depending on the repayment history.
b) Credit limits vary depending on the loan balance.
c) Equal payments are required on a regular basis until the loan is repaid.
d) It is a continuous loan the borrower must repay with a revolving balance.

Insurance can be purchased to protect one from which losses?
a) Car maintenance
b) Health care expenses
c) Maintaining the price of your home
d) Stock market losses

Tyler is trying to be responsible in using his new credit card and has heard there is a way to avoid paying interest on the things he charges. How can he legally avoid paying interest when using his credit card?
a) Tyler needs to make sure he pays the minimum balance every month before the due date on the credit card statement.
b) The use of a credit card requires paying interest. There is not a legal way for him to avoid paying interest if he uses it
c) Tyler needs to limit the use of his credit cards to balance transfers only.
d) Tyler needs to pay the credit card balance in full every month before the due date listed on the credit card statement.

Alyssa is considering purchasing a car and wants to be sure she can afford to drive it during the school year when she does not have a job. Which expense would not be considered part of the total transportation expenses?
a) Fuel
b) Depreciation
c) Parking
d) Automobile payment

Carson’s wallet with his driver’s license, a debit card, and his credit card has been stolen. Which is not something an identity thief might realistically do with this information?
a) Take a college admissions exam in Carson’s name
b) Make purchases with Carson’s credit card
c) Rent an apartment under Carson’s name
d) Use Carson’s name during an arrest

Rent is defined as:
a) the fee charged for performing property management tasks.
b) the purchase price of a housing unit.
c) the cost of using someone else’s property.
d) an advance payment for costs beyond normal wear and tear.

Paxten is purchasing a new phone online. What is the best tip he should consider to do so safely and maximize his satisfaction?
a) Purchase a warranty
b) Use a debit card
c) Review shipping and return policies in advance
d) Always use the seller offering the lowest price

Which is not an example of a data furnisher?
a) Utility company
b) Landlord
c) Credit card company
d) Medical provider

Which is an act of identity theft?
a) Receiving permission to use a parents’ credit card for school clothes
b) Taking the identity of another individual as inspiration for a costume
c) Having the same name as another person
d) Wrongfully acquiring and using someone’s personal identification

Sarah will turn 18 next month. She plans to apply for a credit card. Which statement is true?
a) Sarah cannot obtain a credit card until she turns 21.
b) Sarah can only obtain a credit card if she has a co‐signer or proof of sufficient income to make the required payments.
c) Sarah will need to use a special application since she is under 25.
d) Sarah can obtain a credit card by filling out an application as long as she waits until after her 18th birthday.

Shelby is working on her spending plan and would like to spend less on her food for 6 months as she saves toward purchasing a more reliable vehicle. As she makes her plan, which factor would be least important to consider?
a) The skills she has acquired for preparing meals
b) How much time she has available to prepare food
c) Her personal preferences
d) The nutritional value of the foods she purchases

Charis wants to decrease the risk of fraudulent use of her credit cards. Which strategy would be the most effective?
a) Carrying all credit cards in her wallet so they do not get lost
b) Using credit cards for all her purchases so she only needs to pay one bill each month
c) Giving account numbers over the Internet rather than over the phone
d) Signing the back of her card with her signature and “Please see picture ID”

Matt wants to guard his personal information. Which personal information is least likely to be used by scammers?
a) Credit card numbers
b) Driver’s license numbers
c) Bank account numbers
d) Phone numbers

Ashley plans to do some of her Christmas shopping online. What is a safety tip to follow when she is shopping online?
a) Use a debit card.
b) Use a credit card.
c) Black out the bank account numbers on the credit card bill before returning it with payment.
d) Shred all sales receipts as soon as the item purchased has been received.

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