QBA 4 Review - Answer Key

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1 QBA 4 Review - Answer Key. Which of the following is considered a financial institution? Bank Savings and Loan Credit Union X All of the above. A Bank is called this when it completes the official process of receiving approval from a state or federal regulatory agency to operate in a given area under specified conditions. Credit Union FDIC-Insured Savings and Loan X Chartered 3. A bank may only be chartered by the state where its official headquarters is located. 4. Today, many of the same services are offered by banks, savings and loans and credit unions. X 5. Bank branches are strategically located to make it easy for you to use the services the bank offers. X 6. In the banking world, what does ATM stand for? Asynchronous Transfer Manager X Automated Teller Machine Advanced Transfer Machine Account Technical Manager 7. Neither a deposit transaction nor a withdrawal transaction are financial transactions. 8. You are making a deposit transaction when you put money into a bank. X QBA 4 Review - - Printed: 6//06 Page of 38 Copyright (c) REMTECH, inc.

2 . You are making a withdrawal transaction when you take money out of a bank. X 0. make(s) it possible for you and the bank to earn money when you deposit your money in the bank. Banking Fees Tellers X The Concept of Interest Withdrawals. Which of the following best describes how banks make money? Charge customers to park and to speak to the tellers Most banks do not make any money X Charge customers more interest on loans than they pay on deposits All of the above. Banks are not legally required to maintain a minimum reserve of cash to cover the withdrawal transactions that occur during the normal course of business. 3. Most banks provide access to your money even when the bank is not open. X 4. Banks are not a safe place to keep your money because of the high number of bank robberies. 5. Banks provide a safe place to keep your money, allow you to put your money to work and provide many of the financial services you will need during your life. X 6. This is a formal and extensive record of how good an individual is at maintaining their credit and paying their current and past debts in a timely manner. Credit Score Credit Card Line of Credit X Credit History QBA 4 Review - - Printed: 6//06 Page of 38 Copyright (c) REMTECH, inc.

3 7. If your money is in a bank and it is robbed, you simply lose all of your money and have to start saving all over again. 8. The FDIC is responsible for handling bank failures. X. The FDIC regularly examines banks and savings institutions to make sure each is following the established laws and regulations. X 0. The fees paid by the FDIC member banks fund the operation of the FDIC. X. The banking industry is considered to be the most regulated and supervised business in the United States. X. You are fully protected if you have less than $50,000 in deposit accounts in a FDIC-insured bank. X 3. You can be insured for more than $50,000 depending on how your accounts are structured. X 4. Banks are like any other business because they have assets and liabilities. X 5. A bank can fail when the bank's assets exceed their liabilities. 6. A bank has not failed in the U.S. since 34. QBA 4 Review - - Printed: 6//06 Page 3 of 38 Copyright (c) REMTECH, inc.

4 7. The FDIC monitors banks only when their assets are greater than their liabilities and the bank is struggling. 8. Which of the following items can the FDIC do when a bank fails? Close the bank and sell off all assets to pay the depositors Arrange for another bank to purchase it and assume its liabilities Replace the board of directors and the bank's managers X All of the above. Bank failures only happen when economic conditions in the United States are really bad. 30. This is the general term for procedures and actions by a bank to make sure the day-to-day operation of the bank is in accordance with the law and all government regulations. Fraud X Internal Controls Economic Conditions Liabilities Quality Assurance 3. This is the term for the distortion of financial records, over-payment for assets or services, concealment of information or any other activity designed to steal money from an individual or business. X Fraud Internal Controls Economic Conditions Liabilities Mismanagement 3. Economic conditions are frequently the major cause of bank failures. 33. The vast majority of banks only offer deposit services to their customers. QBA 4 Review - - Printed: 6//06 Page 4 of 38 Copyright (c) REMTECH, inc.

5 34. A time deposit is considered a deposit account, but a checking and savings account are not. 35. This is a deposit account established at a bank where the money deposited will earn interest but can not be withdrawn, without penalty, for a specified period of time. Checking Account Savings Account X Time Deposit Mutual Fund 36. If you borrow money from a bank where you have money deposited, you will still be charged interest on a loan. X 37. Most banks make consumer, business and mortgage loans to their customers. X 38. This is a standard printed form with a date, amount, pay to whom and signature instructing a bank to pay money to another individual or business. Resume Cover letter X Check Credit history 3. Most businesses won't accept checks as payment for goods and services. 40. Most banks charge a fee for having a checking account. 4. Most basic checking accounts do not pay interest on the balance of your account. X QBA 4 Review - - Printed: 6//06 Page 5 of 38 Copyright (c) REMTECH, inc.

6 4. In banking, what does the acronym 'NOW' stand for? No Opportunity Wasted X Negotiable Order of Withdrawal National Overdraft Waiver National Organization for Withdrawals 43. A checking account that periodically pays the account holder interest on the balance of the account if the balance remains above a required minimum level is known as a time deposit. 44. This refers to a tabulated form that allows an individual to record when a check was written, the amount and to whom the money was paid as well as keep an accurate running total of the account balance. Check Credit Check Reality Check X Check Register Statement 45. Savings accounts do not typically pay interest on the balance of the account. 46. The interest rate paid on savings accounts is generally less than the rate paid on checking accounts. 47. Most savings account allow unlimited check writing and rarely require a minimum account balance. 48. This is an investment account opened for a specified length of time in which you can only withdraw funds without penalty after the specified amount of time has elapsed. X Time Deposit Checking Account Savings Account Mutual Fund QBA 4 Review - - Printed: 6//06 Page 6 of 38 Copyright (c) REMTECH, inc.

7 4. Time deposits pay more interest than deposit accounts because you. X promise not to withdraw any money for the length of the investment are limited to a maximum number of withdrawal transactions each month invest a higher minimum amount than you would in a savings or checking account save the bank money by only accessing the account electronically 50. A CD is a time deposit, but a GIC is not. 5. The length of time the money in a Certificate of Deposit (CD) is inaccessible can range from. several hours to several days several days to an entire month X several months to several years two years to an unlimited time 5. Banks are not allowed to offer retirement accounts to their customers. 53. An IRA and Roth IRA are both retirement accounts offered by many banks. X 54. A Roth IRA is an individual retirement account in which contributions are never tax-deferred. X 55. An IRA is an individual retirement account in which contributions are never tax-deferred. 56. This is a type of loan made to individuals and businesses to purchase real estate or land. Business Loan Consumer Loan X Mortgage Loan Collateral Loan QBA 4 Review - - Printed: 6//06 Page 7 of 38 Copyright (c) REMTECH, inc.

8 57. Most banks offer consumer loans to their customers, but not business or mortgage loans. 58. A business loan is made to an individual who owns a business, rather than directly to the legal business entity. 5. A consumer loan is made to an individual so they can buy goods and services. X 60. This is the term for something of value that is pledged by the borrower to the lender to secure a loan. Security Insurance Accessory X Collateral 6. A consumer loan is typically paid back in equal monthly installments or payments over the life of the loan. X 6. A mortgage loan is made to individuals and businesses to purchase real estate or land. X 63. You should treat the process of selecting a bank as a two-step process. X 64. It is nice, but not really important for the bank you select to be FDIC-insured. 65. The bank you select should not be in financial trouble. X QBA 4 Review - - Printed: 6//06 Page 8 of 38 Copyright (c) REMTECH, inc.

9 66. The bank you select should offer at least 50% of the services you need. 67. Which of the following is <span style="text-decoration: underline;">not</span> important when comparing banks? Pays the highest interest rate on deposits Charges the lowest interest rate on loans Has a branch close to your work or home X Serves hot coffee and doughnuts each day 68. A bank's hours of operation and whether it has minimal or no service fees are nice extras, but not actually important features for you to consider when selecting a bank. 6. A budget is a summary of your investments over a given period of time. 70. A Spending Plan is a formal plan documenting how an individual's income will be invested for retirement. 7. To create savings, your income must be considered as the your spending. Golden Key to Stop Gap of Starting Point of X Logical Cap to Mimimum Level for 7. Savings can only be used to pay for expected expenses. 73. You can track every dollar you spend and still not be a financially responsible individual. X QBA 4 Review - - Printed: 6//06 Page of 38 Copyright (c) REMTECH, inc.

10 74. Because of advances in banking technology, it is much harder today to spend more money than you have than it has ever been in the past. 75. Which budget category includes housing, utilities, food, transportation and health care? Positive budget categories X Primary budget categories Secondary budget categories Third-party budget categories 76. Money spent in the secondary budget categories affects your health and welfare. 77. The optimal budget should have all primary budget categories and no secondary budget categories. 78. Income is money received from working and investments. X 7. Investments are financial instruments such as: Money Market Accounts Real Estate Stocks Bonds X All of the above 80. Take home pay is the money you have left after you have paid all of your expenses. 8. Gross Pay is the total amount of money paid to an employee by an employer after taxes and other deductions are subtracted. QBA 4 Review - - Printed: 6//06 Page 0 of 38 Copyright (c) REMTECH, inc.

11 8. The large and small sums of money individuals spend in the different budget categories each pay period are called: Investments Bills X Expenditures Take Home Pay Deductions 83. A short-term budget is typically created for 5 years into the future. 84. A long-term budget is typically created for 5 or more years. X 85. A budget is dynamic and should be adjusted when your personal situation changes. X 86. You should never go longer than one year without updating your budget. X 87. Creating a budget provides benefits whether or not you use it regularly. X 88. If you are realistic and fully embrace the concept of living within a budget, spending less than your take home pay amount is impossible. 8. A budget helps to create potential savings and track income and expense. X 0. A budget allows your money to control you instead of you controlling your money. QBA 4 Review - - Printed: 6//06 Page of 38 Copyright (c) REMTECH, inc.

12 . Which of the following persons should use a budget? A student working part-time A parent A full-time worker A retired person X All of the above. A budget is an essential financial tool for all individuals because it will help them reach their financial goals in life. X 3. It is never too late to begin using a budget. X 4. Which of the following individuals would benefit from creating and using a budget? High school students College students Adults Retirees X All of the above 5. The Primary Budget categories correlate to an individual's. weaknesses wants X needs wishes 6. The Secondary Budget categories correlate to an individual's needs. 7. Items in your "Needs" budget categories include the goods and services you pay for that are not essential to your health and welfare. 8. Items in your "Wants" budget categories include the goods and services an individual pays for that are not essential to their health and welfare, but can affect the quality of their life. X QBA 4 Review - - Printed: 6//06 Page of 38 Copyright (c) REMTECH, inc.

13 . Paying to attend a sporting event, going to a movie and eating out can be classified as items in the "needs" budget categories. 00. Paying your monthly rent, electricity bill and water bill can be classified as items in your "wants" budget categories. 0. The average individual has only one or two sources of income. X 0. An employee's Pay Period is: The time period their wage is based on ($/hour, $/year) The fiscal year their pay and deductions are based on X The length of time between paydays The time between when their paycheck is dated and when it is deposited in the bank 03. Without a, most people would not know where all their money is spent. calculator bank statement X budget computer 04. Creating a budget is 5% psychological and 5% manual labor. 05. A budget is simply a tool that helps individuals understand when, where and why they are spending their money. X 06. First step to creating and using a budget is determining the amount of income you'll receive after. the holidays calculating your gross income dividends X tax deductions QBA 4 Review - - Printed: 6//06 Page 3 of 38 Copyright (c) REMTECH, inc.

14 07. Income includes all the money you earn at work, tips, baby-sitting, gifts and investments. X 08. Determining how much money you have coming in will also identify the minimum amount you can spend. 0. Always consider your income after tax deductions as the logical cap to your spending. X 0. You should make a concerted effort to spend more money than you take home. X never always sometimes conveniently. Potential savings are only created when you spend each pay period. more money than your take home pay the same amount of money you bring home X less money than you bring home all of the money in your gross income. You should consider saving a portion of your income each pay period. X 3. What percentage of your income do many experts recommend you should consider as the maximum amount you should spend each pay period? 00% X 0% - 8% 50% - 75% 5% - 50% 0% QBA 4 Review - - Printed: 6//06 Page 4 of 38 Copyright (c) REMTECH, inc.

15 4. Budget categories are divisions or collection groups individuals create within their budget to collect and analyze. overpayments bank fees X similar expenses investments 5. The primary budget categories are also known as your wants. 6. is generally <span style="text-decoration: underline;">not</span> considered a primary budget category. Housing Utilities Food Transportation X Leisure 7. The secondary budget categories are also known as your needs. 8. is generally <span style="text-decoration: underline;">not</span> considered a secondary budget category. Clothing Leisure Education Miscellaneous X None of the above. Your budget categories should reflect how your friends spend their money. 0. Those expenses that do not fit into one of the budget categories should simply not be recorded. QBA 4 Review - - Printed: 6//06 Page 5 of 38 Copyright (c) REMTECH, inc.

16 . The your budget, the better you will be able to manage your money. X more accurate less accurate more difficult less difficult. Small purchases over time can become a significant expense. X 3. Primary budget categories are essential to your health and welfare. X 4. Primary budget categories typically include. Housing Utilities Food Transportation X All of the above 5. It is simple to reduce money spent in the primary budget categories because these categories only affect your health and welfare. 6. Eliminating some of the primary budget categories is usually quite easy. 7. Reducing your expenses in some of the primary budget categories is possible. X 8. Eating at home rather than dining out helps to reduce the amount of money spent in the primary budget categories. X QBA 4 Review - - Printed: 6//06 Page 6 of 38 Copyright (c) REMTECH, inc.

17 . Secondary budget categories affect your. health and welfare X quality of life potential savings All of the above 30. Secondary budget categories include. Clothing Leisure Education Miscellaneous X All of the above 3. Reducing the amount of money spent in the secondary rather than primary budget categories is easier because they do not affect your health and welfare. X 3. Which of the following helps to reduce money spent in the secondary budget categories? X Simply rent a movie rather than go out to the movie theater Keep an older vehicle rather than purchase a new one Move to a cheaper apartment Eat at home rather than dine out All of the above 33. Which of the secondary budget categories is the most important to your financial situation? Clothing Leisure X Education Miscellaneous None of the above 34. Money spent in the primary budget categories is sometimes called discretionary spending. 35. Spending more money than you take home each pay period is one of the major goals of having a budget. QBA 4 Review - - Printed: 6//06 Page 7 of 38 Copyright (c) REMTECH, inc.

18 36. Potential savings can be saved or invested for future use. X 37. Which of the following should individuals use to help determine where they have been spending their money and how much is being spent in each budget category? Receipts Kept from Shopping Trips Credit Card Statements Check Register Entries X All of the above 38. Approximately how much of an average American's take home pay is spent in the primary budget categories? Less than 5% Around 35% X More than 70% Roughly 0% 3. If your monthly take home pay is $,500 and you spend 30% of it on rent, what is your monthly rent payment? $,050 $ 650 $ 500 X $ 450 $ You should attempt to save % or more of your take home pay each pay period. X 4. The small, miscellaneous items you purchase each day are not considered as expenses. 4. Many, but not all expenses you have can be classified as 'needs' or 'wants'. QBA 4 Review - - Printed: 6//06 Page 8 of 38 Copyright (c) REMTECH, inc.

19 43. The basic necessities of life are considered. wants X needs basic expenses All of the above 44. Expenses affecting your health and welfare are considered 'wants'. 45. Spending on which of the following categories is <span style="text-decoration: underline;">not</span> considered a basic necessity of life? Housing Utilities Food Health Care X None of the above 46. Expenses affecting the quality of your life are considered 'needs'. 47. Making a purchase in which of the following category is considered a 'want'? Transportation X Education Housing Food All of the above 48. You are creating savings if you spend more money than you make. 4. Most individuals completely understand how fast debt accumulates. QBA 4 Review - - Printed: 6//06 Page of 38 Copyright (c) REMTECH, inc.

20 50. Establishing credit is very important for. the elderly only those 50 or older retired people X young adults 5. Renting an apartment, buying a car and getting a job are things that aren't affected by having bad credit. 5. Before 80, credit was not generally extended to those who did not have the ability to repay debt. X 53. What does 'FED' stand for? Federal Education Department First Education Department X Federal Reserve System Fiscal Exchange Department 54. Obtaining credit today is not as regulated as it was prior to 80. X 55. You should consider the effects on your life when making any financial decision. basic X long-term short-term lifestyle positive 56. Typically, young people acquire their knowledge of from their parents, friends and by trial and error. clothing trends technology X spending cars All of the above QBA 4 Review - - Printed: 6//06 Page 0 of 38 Copyright (c) REMTECH, inc.

21 57. Young people are very resilient and rarely give in to peer pressure or the urge of instant gratification. 58. Stress and/or anxiety placed on an individual by their friends to act or respond in a manner generally accepted by their friends is usually called this. Friend Rapport X Peer Pressure Steady Relationship Job Anxiety Ethnic Tolerance 5. Which of the following is <span style="text-decoration: underline;">not</span> considered a life event? Getting Married Having Children Retirement X Buying Clothing Graduation 60. What does the acronym 'BLS' stand for? Basic Life Services Business Legal Services X Bureau of Labor Statistics Banking Legal Society 6. Based on the Consumer Expenditure Survey (CES), which adult age group spends more on health care? Adults 5-34 Adults Adults X Adults An error has occurred while processing HtmlTextBox 'HtmlTextBox': An error occurred while parsing EntityName. Line, position The cost of spending will always be less than the price of the item you purchase. 63. Opportunity cost is the cost of making a spending decision compared to the cost of the other financial alternatives. X QBA 4 Review - - Printed: 6//06 Page of 38 Copyright (c) REMTECH, inc.

22 64. The cost of spending depends on. how you will pay the opportunity cost of spending the risk to your credit X All of the above 65. To the nearest dollar, what would be the opportunity cost associated with spending $500 now rather than purchasing a 5-year CD paying 6% per year? $ 7 $ 3 X $ 6 $ The future is to predict. simple straightforward mind-numbing X difficult 67. You should be cautious about making spending decisions based on what you believe may happen in the future. X 68. Most people believe it is easier to use credit than pay cash for goods and services. X 6. You should always relate the cost of an item to the number of hours you have to work to pay for it. X 70. Debt can be classified as or debt. bad, worse debit, credit card housing, health care X installment, revolving 7. You will be required to make a minimum monthly payment to repay installment debt. QBA 4 Review - - Printed: 6//06 Page of 38 Copyright (c) REMTECH, inc.

23 7. Installment debt is money owed via a short-term loan agreement. 73. Installment debt is also called. open-end debt X closed-end debt incremental debt equal debt credit card debt 74. A is an example of revolving debt. Home Mortgage Car Loan X Credit Card Savings Account 75. You will be required to make a minimum monthly payment to repay revolving debt. X 76. Revolving debt is also called open-end debt. X 77. This is the name for a proceeding in which an individual or business, unable to meet their financial obligations, petitions the court for protection from their collectors. Liquidation X Bankruptcy Insolvency Estate sale 78. The number of individuals declaring bankruptcy has decreased to less than 0,000 per year since 000. QBA 4 Review - - Printed: 6//06 Page 3 of 38 Copyright (c) REMTECH, inc.

24 7. Which of the following do financial experts say is <span style="text-decoration: underline;">not</span> a reason the typical consumer has more debt today than in the past? Low interest rates Internet shopping Easy access to credit College tuition and fees X None of the above 80. All debt is bad. 8. Good debt is debt acquired when purchased assets increase in value while owned or provide distinct advantages while the debt is being repaid. X 8. Purchasing items on credit that increase in value while you are paying for them is considered good debt. X 83. Purchasing wasting assets on credit is considered extremely good debt. 84. Which of the following is an example of bad debt? Purchasing new clothes An island vacation A fancy meal at a restaurant X All of the above None of the above 85. You have too much debt if your credit card limit is higher than your monthly take home pay. 86. It is possible to get out of debt. X QBA 4 Review - - Printed: 6//06 Page 4 of 38 Copyright (c) REMTECH, inc.

25 87. What is the common term for the act or process of never spending more money than you currently have? Avoiding Wasting Assets Keeping up with the Joneses X Living Within Your Means Maximizing Your Net Worth Accumulating Good Debt 88. Getting out of debt requires you to adjust your and to match your income. salary, bonuses budget, assets good debt, bad debt X lifestyle, spending habits 8. It is better to pay interest on debt than to earn interest on an investment. 0. People typically find that many of their are really and can be reduced or eliminated. investments, bad X needs, wants long-term goals, short-term goals goals, impossible None of the above. Declaring bankruptcy will only affect your ability to get a loan, credit or credit card for a few months.. When you declare bankruptcy, the Federal Bankruptcy Court will develop a plan allowing you to eliminate all or some of your debt under the guidance of the court. X 3. Not all debts can be absolved by declaring bankruptcy. X QBA 4 Review - - Printed: 6//06 Page 5 of 38 Copyright (c) REMTECH, inc.

26 4. Property that has been identified as essential to starting over and cannot be seized by the Federal Bankruptcy Court. Excepted property Excused property X Exempt property Excuse property None of the above 5. Today, the two most predominate types of personal bankruptcy are and. Chapter 5, Chapter 5 X Chapter 7, Chapter 3 Chapter 7, Chapter 33 Chapter 3, Chapter 7 None of the above 6. Which of the following is <span style="text-decoration: underline;">not</span> a type of personal bankruptcy? X Chapter 86 Chapter 3 Chapter Chapter 7 None of the above 7. Chapter 7 bankruptcy is also call bankruptcy. reorganization Chapter 3 insolvency X liquidation None of the above 8. Chapter 3 bankruptcy is also called bankruptcy. X reorganization insolvency liquidation None of the above. You can think of credit as an unlimited amount money available to you that must be paid back. QBA 4 Review - - Printed: 6//06 Page 6 of 38 Copyright (c) REMTECH, inc.

27 00. The amount of credit you use is added to the total amount of credit available to you. 0. Your debt increases by the amount of money you use on credit, plus the interest you must pay. X 0. There are both advantages and disadvantages to using credit. X 03. Most people would never be able to purchase a vehicle or buy a home without. cash X credit their parents banks None of the above 04. Businesses reserve their best credit terms and rates for those who use credit responsibly. X 05. An increase in the interest rate increases the burden of making payments for borrowers. X 06. Easy access to credit makes it easier for all individuals to make wise spending decisions. 07. are passed by Congress to ensure everyone is treated equally in our society. X Consumer protection laws Highway and Traffic laws Safety and Health laws Property Tax laws QBA 4 Review - - Printed: 6//06 Page 7 of 38 Copyright (c) REMTECH, inc.

28 08. The Equal Credit Opportunity Act (ECOA) was passed to ensure. all individuals receive the same amount of credit all lenders disclose the APR for all financial transactions X all individuals have equal access to credit all banks must provide credit to all those that apply None of the above 0. Your credit history is considered sensitive information that must be safeguarded by those maintaining it. X 0. Credit makes retail items available to individuals who do not have enough cash to purchase them. X. When you buy an item on credit, you are paying more than the sticker price for the item. X. A credit bureau is a company that collects information relevant to your employment history to see if your current paycheck covers your debt. 3. A credit bureau is also called a debt collection agency. 4. There are major credit bureaus in the United States. X more than 0 5. Equity, TransAtlantic, and Experius are the three major credit bureaus in the U.S. QBA 4 Review - - Printed: 6//06 Page 8 of 38 Copyright (c) REMTECH, inc.

29 6. A credit bureau does not make credit decisions for. consumers individuals the government X businesses None of the above 7. This is the term for a formal report of an individual's credit history prepared by one of the major credit bureaus. The report contains an individual's complete payment history and status of all credit accounts. Bureau Report Home Report X Credit Report Debit Report None of the above 8. Each year you are entitled to free credit report(s) from each of the major credit bureaus. 0 X 3 6. You should request a credit report at least every 0 years to ensure the information in the report is correct. 0. Which of the following is a section within a credit report? Identifying Section Credit Information Section Public Record Section Inquiry Section X All of the above. A credit score is a single number from 0 to 00.. More than 75% of individuals have a credit score higher than 800. QBA 4 Review - - Printed: 6//06 Page of 38 Copyright (c) REMTECH, inc.

30 3. A credit score indicates how long you have been using credit. 4. Credit scores help businesses assess credit risk more fairly for all individuals. X 5. A credit score is also called a FED score. 6. It is important to establish credit before you actually need it. X 7. Opening a checking account or savings account with a local bank is a way to begin establishing credit. X 8. It is up to the credit bureaus to ensure you use your credit responsibly.. Which of the following is a way to show businesses you understand credit and will use it responsibly? Never "max out" a credit card Always pay bills on time Never purchase more on credit than you can repay Only have or credit cards X All of the above 30. Most experts agree it is much easier to use credit responsibly than to overcome credit problems. X 3. Once your credit is damaged, you must pay off your debt and then begin to actively monitor your credit history. X QBA 4 Review - - Printed: 6//06 Page 30 of 38 Copyright (c) REMTECH, inc.

31 3. Credit cards were first used in the U.S. during the. 850's X 0's 40's 60's 80's 33. A credit card represents a line of credit available to the cardholder. X 34. The company issuing the credit card will deposit money into your bank account each time you use their card. 35. A Credit Limit refers to the maximum amount of credit available to an individual, as established with their bank or financial institution. X 36. Fortunately for all, it is more difficult to misuse a credit card than it is to use one responsibly. 37. There are no advantages or disadvantages to using a credit card. 38. A credit card's terms and conditions do <span style="text-decoration: underline;">not</span> specify. the interest rate your grace period for payment the interest calculation method X your required credit score to keep the card All of the above QBA 4 Review - - Printed: 6//06 Page 3 of 38 Copyright (c) REMTECH, inc.

32 3. Which of the following type(s) are major types of credit card classifications? Bank, Travel/Entertainment, and Designer Cards Travel/Entertainment, House, and National Cards X House, Bank, and Travel/Entertainment Cards Bank, Debit, and House Cards Debit, Bank, and Travel/ Entertainment Cards 40. Bank credit cards are issued by banks to their customers. X 4. Bank credit cards are not accepted by most retail stores to make purchases. 4. Which of the following best describes the three types of bank credit cards? Typical, Debt and Secured Standard, Debt and Protected X Standard, Debit and Secured Standard, Charge and Safe 43. A standard credit card comes with a fixed line of credit and a fixed or variable APR. X 44. Using a debit card to make purchases automatically deposits money into your checking account. 45. Debit cards are sometimes called delayed payment cards. 46. A secured credit card allows individuals with bad credit to use a credit card at secure businesses and banks. QBA 4 Review - - Printed: 6//06 Page 3 of 38 Copyright (c) REMTECH, inc.

33 47. A secured credit card can be used to make a purchase even if the holder of the card exceeds the amount of money available in the bank account. 48. Travel/Entertainment cards work exactly like bank credit cards except the total balance must be paid when you receive your monthly statement. X 4. Travel/Entertainment cards are used almost exclusively by people who are retired or have no regular job. 50. House credit cards are issued by banks. 5. House credit cards can only be used in the store of the retail business issuing the card. X 5. Most credit card companies will send you a billing statement. daily weekly X monthly annual 53. Statistics show that only of all credit cardholders pay their accounts in full each month. 0% 35% X 50% 85% None of the above 54. A Credit Period is the length of time, after the payment due date, an individual has to pay a credit card balance in full and avoid having to pay interest on the balance. QBA 4 Review - - Printed: 6//06 Page 33 of 38 Copyright (c) REMTECH, inc.

34 55. The minimum monthly payment is the least amount you can pay on credit card debt each billing period. X 56. The term for anything with monetary value owned by an individual or business or is owed to that individual or business. X Asset Credit Fees Debt Collateral 57. The interest rate for credit cards is significantly lower than the interest rate for regular bank loans. 58. Credit card debt is not secured by any of your assets. X 5. The is the annual interest rate charged when you do not pay your total balance each billing period. Fixed rate Variable rate Period interest rate X APR None of the above 60. To maximize your savings, you should never pay more than the minimum monthly payment amount on credit card debt. 6. If you pay interest charges on a credit card, there are no other fees you can be charged. 6. Each credit card is different and can have different fees associated with it. X QBA 4 Review - - Printed: 6//06 Page 34 of 38 Copyright (c) REMTECH, inc.

35 63. Which of the following is a common fee associated with credit cards? Annual Fee Late Charge Fee Over-Limit Fee Cash Advance Fee X All of the above 64. Which of the following methods is used by credit card companies to calculate the amount interest to be charged when the balance is not paid in full each billing period? Previous balance method Adjusted balance method Average daily balance method X All of the above 65. Consumer protection laws are designed to protect consumers from unfair and illegal business practices. X 66. Which of the following is <span style="text-decoration: underline;">not</span> an important consumer protection law? X Equal Credit Card Obtainment Act (ECCOA) Fair Credit Reporting Act (FCRA) Truth in Lending Act (TILA) Credit Repair Organization Act (CROA) 67. The Fair Credit Billing Act (FCBA) requires creditors to be fair and polite on the phone, and only call between :00 AM and 6:00 PM when they call to collect their money owed. 68. Few people have ruined their credit either through lack of knowledge or irresponsible use of credit cards. Mostly it is due to factors beyond their control. 6. Many parents have expressed concern about credit card companies aggressively marketing credit cards to college students. X 70. Each person is unique and has personal information that only applies to them. X QBA 4 Review - - Printed: 6//06 Page 35 of 38 Copyright (c) REMTECH, inc.

36 7. Which of the following is considered personal information and can be stolen by another individual? Social security number Bank account number Credit card number Driver's license number X All of the above 7. Thanks to computerized databases, it costs little and takes only a few hours to restore your credit when your identity happens to be stolen. 73. The Fair Credit Reporting Act does not limit the amount of money you are liable for if your identity is stolen. 74. Most experts agree it is harder to guard your personal information than it is to repair your credit after a thief has abused it. 75. thieves hack into computers to gain access to personal information. All Most X Some Very Few 76. Identity thieves never steal mail from your mailbox because it is a federal crime and other methods are much less risky. 77. You should keep all of your personal information in your purse or wallet because you might need it in an emergency. 78. You should never give out your personal information over the phone unless you know and trust the caller. X QBA 4 Review - - Printed: 6//06 Page 36 of 38 Copyright (c) REMTECH, inc.

37 7. Spoofing or cloned websites are not a problem for either the government or major corporations. 80. This is the common term for the process of going through an individual's trash to collect discarded documents containing the owner's personal information. Trash Hijacking Garbage Gala Junk Journey X Dumpster Diving Sewer Surfing 8. If you have anti-virus software, identity thieves are incapable of using fake s to make you think they are from a company you routinely do business with. 8. You should be aware of shoulder surfers attempting to invade your space when conducting business transactions. X 83. Money is the key to preventing and recovering from identity theft. 84. You should always guard your Social Security number because it is the key to the rest of your personal information. X 85. An individual must monitor their credit history and always be looking for credit activity that's not theirs to help prevent identity theft. X 86. Which of the following is a way to prevent someone from gaining access to your personal information? Guarding your Social Security number Monitor your credit history Monitor your credit card bills Shred all bills and business papers containing personal information X All of the above QBA 4 Review - - Printed: 6//06 Page 37 of 38 Copyright (c) REMTECH, inc.

38 87. Mailing all correspondence from secure locations is a way to prevent someone from stealing your personal information. X 88. Time is not an important factor when your identity is stolen, since you are protected by law from being liable for more than a minimum amount. 8. If your identity is stolen, you need to contact the three major credit bureaus and have them place a fraud alert on your credit history. X 0. If you're a victim of identity theft, make sure to keep alert for additional fraudulent activity in your name. X QBA 4 Review - - Printed: 6//06 Page 38 of 38 Copyright (c) REMTECH, inc.