Financial Quiz Answers

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1) Matt and Eric are young men. Each has a good credit history. They work at the same company and make approximately the same salary. Matt has borrowed $6,000 to take a foreign vacation. Eric has borrowed $6,000 to buy a car. Who is likely to pay the lowest finance charge?

Answer: c) Eric will pay less because the car is collateral for the loan.

2) Many savings programs are protected by the federal government against loss. Which of the following is not?

Answer: a) A bond issued by one of the 50 states.

3) Which of the following statements is true?

Answer: c) Banks and other lenders share the credit histories of their borrowers with each other and are likely to know of any loan payments that you have missed.

4) Doug must borrow $12,000 to complete his college education. Which of the following would NOT be likely to reduce the finance charge rate?

Answer: c) If he went to a state college rather than a private college.

5) If you had a savings account at a bank, which of the following would be correct concerning the interest that you would earn on this account?

Answer: d) Income tax may be charged on the interest if your income is high enough.

6) Kelly and Pete just had a baby. They received money as baby gifts and want to put it away for the baby's education. Which of the following tends to have the highest growth over periods of time as long as 18 years?

Answer: d) Stocks

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