GEB 3006 Exam 3 Financial Literacy Questions And Answers 100% Verified.
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? - ...
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
In the event that you had $10,000 to invest in a bank Certificate of Deposit (CD), what
would be your best course of action in the event that you believed interest rates were
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