Quiz about Dave Ramsey Debt Unit Test

Question 1

A yearly fee that's charged by the credit card company for the convenience of the credit card

Accepted Answer

Annual Fee

Answer

Annual Percentage Rate (APR)

Answer

ARM

Answer

Balloon Mortgage

Question 2

Cost of borrowing money on an annual basis; takes into account the interest rate and other related fees on a loan.

Accepted Answer

Annual Percentage Rate (APR)

Answer

Annual Fee

Answer

ARM

Answer

Balloon Mortgage

Question 3

variable-rate mortgage; mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets.

Accepted Answer

ARM

Answer

Annual Fee

Answer

Annual Percentage Rate (APR)

Answer

Balloon Mortgage

Question 4

a lessening in value

Accepted Answer

Depreciation

Answer

debt consolidation

Answer

debt Snowball

Answer

finance charge

Answer

foreclosure

Question 5

A fee for borrowing money, added to a monthly credit card bill.

Accepted Answer

finance charge

Answer

debt consolidation

Answer

debt Snowball

Answer

Depreciation

Answer

foreclosure

Question 6

The seizure of property from borrowers who are unable to repay their loans

Accepted Answer

foreclosure

Answer

debt consolidation

Answer

debt Snowball

Answer

Depreciation

Answer

finance charge

Question 7

a loan based on the difference between the current market value of a home and the amount the borrower owes on the mortgage

Accepted Answer

home equity loan

Answer

grace period

Answer

introductory rate

Answer

lease

Question 8

a contract granting use or occupation of property during a specified time for a specified payment

Accepted Answer

lease

Answer

grace period

Answer

home equity loan

Answer

introductory rate

Question 9

Time frame that a loan agreement is in force, and before or at the end of which the loan should either be repaid or renegotiated for another term

Accepted Answer

loan term

Answer

myth

Answer

paradigm

Answer

tax deduction

Question 10

a model or example; school of thought

Accepted Answer

paradigm

Answer

loan term

Answer

myth

Answer

tax deduction

Question 11

Teens are a huge target of credit card companies today.

Accepted Answer

True

Answer

Flase

Question 12

It is okay to use a credit card if you pay it off every month.

Accepted Answer

False

Answer

True

Question 13

Preferred method of debt repayment; includes a list of all debts organized from smallest to largest balance; minimum payments are made to all debts except for the smallest, which is attacked with the largest possible payments.

Accepted Answer

Debt Snowball

Answer

Credit Counseling

Question 14

You need a credit card to rent a car or check in to a hotel

Accepted Answer

False

Answer

True

Question 15

Co-signing a loan is a good way to help a friend or relative.

Accepted Answer

False

Answer

True

Question 16

Which of the following is not a recommended step in the Drive Free method of purchasing a car?

Accepted Answer

Explore new car dealerships for the best interest rate.

Answer

Plan your purchase in advance using the sinking fund method of saving.

Answer

Place your savings in a mutual fund so that your money can make more money.

Answer

Start with an inexpensive car and gradually move up in car value as your savings increases.

Question 17

Which of the following things cannot be done with a debit card but can be done with a credit card?

Accepted Answer

Go into debt

Answer

Rent a car

Answer

Purchase something online

Answer

Purchase an airline ticket

Question 18

When a person owes more on an item (like a car or house) than it is worth, the person is said to be _________ on the loan.

Accepted Answer

Upside Down

Answer

Secured

Question 19

Which of the following is not recommended in the debt snowball method of getting out of debt?

Accepted Answer

Every extra dollar you get should be thrown at the largest debt first.

Answer

List your debts in order from smallest to largest balance and focus on paying the smallest debt off first.

Answer

Attack your debt with intensity.

Answer

Every time you pay off a debt, you add its old minimum payment to your next debt payment.

Question 20

Which of the following is not a factor in determining a FICO score?

Accepted Answer

Paying cash for all purchases

Answer

Getting a personal loan from a bank

Answer

Using credit cards

Answer

Taking out a mortgage on a house

Question 21

What factors affect a credit score?

Accepted Answer

All of the above

Answer

Type of debt

Answer

New Debt

Answer

Duration of Debt

Question 22

12) A credit score is intended to measure:

Accepted Answer

The risk of your not repaying debt

Answer

Your financial success

Answer

Your income level

Answer

The amount of money you have in the bank

Question 23

If you are a victim of identity theft, you are only responsible for paying back half of the debt.

Accepted Answer

False

Answer

True

Question 24

There are three credit bureaus: Experian, TransUnion and Equifax.

Accepted Answer

True

Answer

False

Question 25

You can and should obtain a free copy of your credit report annually in order to check for any suspicious activity.

Accepted Answer

True

Answer

False

Question 26

An intentional effort to deceive another individual for personal gain

Accepted Answer

Fraud

Answer

Mean people

Answer

Fake

Answer

Crime

Question 27

Which is NOT a positive credit card behavior?

Accepted Answer

Post your credit card number on Facebook

Answer

Be aware of how your credit card affects your credit history

Answer

Pay the entire amount on time every month

Answer

Check statement monthly for errors

Question 28

A scam in which an email is sent from someone posing as your bank or other legitimate business asking for personal information.

Accepted Answer

Phishing

Answer

Social Engineering

Answer

Skimming

Answer

Pharming

Question 29

Software or a hardware device that filters information coming in to your computer.

Accepted Answer

Firewall

Answer

Antivirus

Answer

Phishing

Answer

Spyware

Question 30

A warning that can be placed on a credit report to flag that a person may be a victim of identity theft.

Accepted Answer

fraud alert

Answer

hack

Answer

encrypt

Answer

spam

Question 31

The schedule prepared showing the installment payments for the period (called the term of the loan) is called___________.

Accepted Answer

Amortization Table

Answer

Payment Method Table

Answer

Installment Payment Table

Answer

Mortgages Table

Question 32

What is the relationship of interest and principal in amortization schedule?

Accepted Answer

Indirectly proportional

Answer

Directly proportional

Answer

Joint proportional

Answer

Partitive proportion

Question 33

A portion of each payment is for interest while the remaining amount is applied towards the __________________________ balance.

Accepted Answer

principal

Answer

interest

Answer

interest rate

Answer

loan term

Question 34

Initially, a large portion of each payment is devoted to __________________________.

Accepted Answer

interest

Answer

the principal balance

Answer

loan term

Answer

interest rate

Question 35

Buying used cars is a good way to minimize depreciation

Accepted Answer

True

Answer

False

Question 36

It is never wise to take out an ARM or balloon mortgage.

Accepted Answer

True

Answer

False

Question 37

The bank uses a ... to find out how prospective borrowers repaid their past debts.

Accepted Answer

credit bureau

Answer

profile

Answer

loan agreement

Answer

budget

Question 38

Because Mr. Parker is ..., his application for a loan is approved.

Accepted Answer

creditworthy

Answer

profile

Answer

on time

Answer

character

Question 39

The other name for credit bureau is ...

Accepted Answer

reporting agency

Answer

character

Answer

passbook loan

Answer

loan agreement

Question 40

Three kinds of data that the computer at the reporting agency has are ...

Accepted Answer

a person's employment record

Accepted Answer

a person's background

Accepted Answer

a person's history of borrowing and repayment

Answer

a person's family background

Question 41

____________ is the policy of the State to protect its citizens from a lack of awareness of the true cost of credit to the user by assuring a full disclosure of such cost with a view of preventing the uninformed use of credit to the detriment of the national economy.

Accepted Answer

Truth in Lending Act

Answer

Fair Debt Collections Protection Act

Answer

Fair Credit Reporting Act

Answer

Fair Lending Act

Answer

Telephone Consumer Reporting Act

Question 42

____________ is a federal law that limits the behavior and actions of third-party debt collectors who are attempting to collect debts on behalf of another person or entity

Accepted Answer

Fair Debt Collections Protection Act

Answer

Telephone Consumer Reporting Act

Answer

Fair Lending Act

Answer

Telephone Consumer Reporting Act

Answer

Fair Credit Reporting Act

Question 43

What percentage of debt to income is considered High?

Accepted Answer

39%-50%

Answer

24%-38%

Answer

51% or more

Answer

16%-23%

Question 44

How is net worth calculated?

Accepted Answer

assets - liabilities

Answer

liabilities - assets

Answer

money - loans

Answer

assets + liabilities

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