#1
Which of the following is a type of consumer credit?
Mortgage
ExplanationA long-term loan used to purchase real estate.
#2
What is the function of a financial institution?
To provide consumer credit
ExplanationTo offer various financial services, including lending money to consumers.
#3
Which of the following is NOT a type of financial institution?
Hospital
ExplanationA healthcare facility, not involved in financial services.
#4
What is the main difference between revolving credit and installment credit?
Installment credit has a fixed repayment schedule, while revolving credit does not.
ExplanationInstallment loans require regular fixed payments until the debt is paid off, while revolving credit allows borrowing up to a certain limit with flexible payments.
#5
What is a credit score?
A numerical representation of a person's creditworthiness
ExplanationA score used by lenders to assess the risk of lending money to a borrower.
#6
Which of the following factors can affect your credit score?
All of the above
ExplanationPayment history, credit utilization, length of credit history, types of credit used, and new credit inquiries.
#7
What is the term for the interest rate charged on a credit card balance?
Annual percentage rate (APR)
ExplanationThe annual rate charged for borrowing or earned through investment, expressed as a percentage.
#8
Which federal agency regulates consumer credit in the United States?
Consumer Financial Protection Bureau
ExplanationResponsible for enforcing consumer protection laws, including those related to credit.