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GEB 3006 exam 3 financial literacy Questions with Correct Answers.
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GEB 3006 exam 3 financial literacy Questions with Correct Answers.
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GEB 3006 exam 3 financial literacy Questions withCorrect Answers
What two factors count for 65% of your FICO score? Correct Answer-
Payment history and outstanding debts
Which company has developed the MOST commonly used credit score
to evaluate an individual's credit? Correct Answer-Fair Isaac
Corporation
You should try to achieve a FICO score of at least ________ in order to
receive a top credit rating. Correct Answer-760
What is the debt to credit limit ratio for the following individual?Visa
Card Master Card Credit Limit $10,000 $20,000 Balance Due $2,000
$19,000 Available Credit$8,000$1,000 Correct Answer-70%, and
decreasing this ratio will help the credit score
It is possible that canceling an old credit card with no balance due could
hurt your credit score. Correct Answer-TRUE
If an individual gets several quotes on a new mortgage within a two
week period, it should not immediately impact their credit score. The
credit score may later be impacted by the size of the mortgage and
related monthly payments. Correct Answer-TRUE
,A married couple is applying for a mortgage. One spouse has a low
FICO score and one has a high FICO score. What is their best strategy
for getting the lowest interest rate possible? Correct Answer-Apply in
the name of the spouse with the highest score
Which of the following statements is true? Correct Answer-The treasury
yield curve is normally upward sloping, with long term rates being
higher than short term rates.
Having mortgage debt is generally considered better than having credit
card debt. Correct Answer-True
It is illegal for an employer to review your credit report as part of the
application process. Correct Answer-False
Assume you have three credit cards, each having a balance due of $500
for a total of $1,500. Each card has a different interest rate ranging from
12% to 20%. The minimum payment on each card is $10. If the
minimum payment is not made, there is a $50 penalty.If you only have
$500 to pay on your credit cards this month, the best way to minimize
your interest cost is to pay an equal amount of money on each card.
Correct Answer-False
Insurance companies are allowed to review and consider your credit
score before quoting a premium. Correct Answer-True
, In general, applying for and receiving new credit cards will tend to
decrease your FICO score. Correct Answer-True
Assume that your parents have more liabilities than assets as a result of a
$100,000 of credit card debt. In the event of their death, the children will
inherit the credit card debt. Correct Answer-False
Interest rates on 30 year fixed rate mortgages tend to follow or correlate
with: Correct Answer-The 10 year treasury note rate
Interest rates paid by corporations and individual are normally derived
from the current: Correct Answer-The treasury yield curve
At a given interest rate, extending the term of your auto loan from 36
months to 60 months will: Correct Answer-Decrease your payment and
increase the amount of interest paid over the loan
Interest rates for corporations and individuals are set based on the
Treasury Yield Curve on any given day. The curve represents the cost of
borrowing for the federal government, and Correct Answer-Is generally
upward sloping, with short term interest rates being lower than long term
interest rates
If we experience a rapid increase in inflation, the Federal Reserve would
likely ________ interest rates. Correct Answer-Increase
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