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Credit Practice QuestionsThe three C’s of credit are:a)Character, capital and charityb)Character, capacity and charityc)Charity, capital and censord)Character, capacity and capitale)Capital, capacity and conciliateFrom the list below, pick an advantage of using credit to complete a purchase:a)Impulse buyingb)Overbuyingc)Financial Difficultiesd)Instant enjoymente)Cost of creditAn established credit rating can be damaged if:A person has no collateral.b)A borrower fails to live up to the repayment terms of an agreement.c)A person’s income increases.d)A person’s expenses decrease.e)None of the aboveVisa and MasterCard will allow you to purchase on credit and not charge any interest as long as you:a)limit the amount of the cash advance.b)pay a minimum amount each month.c)pay the balance owing in full.d)do not exceed your credit limit.e)none of the above.A good credit rating is established bybeing a nice personmaking your payments on timemaking your payments a little past their due datenot making any payments on your credit cardbeing a terrible personThis “C” refers to the borrower’s reliability and trustworthiness.charactercostcapacitycapitalcollateralWhich of the following is a disadvantage of credit?Impulse buyingEmergenciesSavingsConvenienceInstant enjoymentA person or business that is owed money is a _______________.CreditorDebtorInvestorFinancial institutionNone of the aboveMrs. Campbell has approached you to borrow money. You decide to give her $2 500 at 4.5% for 7 weeks. Approximately how much money does Mrs. Campbell owe you all together?$112.50$15.14$2 612.50$2 515.14$90.00An indication of the level of risk that someone would pose if credit were granted to them, is called:failure raterisk managementliabilitycredit ratingdebt worthyA business that gathers credit information on all borrowers in a particular region for the purpose of selling that information is called a(n)credit unioncredit bureaubanktrust companyinsurance companyMs. Thomson has approached you to borrow money. You decide to give her $7,500 at 6.5% for 10 weeks. Approximately how much money does Ms. Thomson owe you all together?$487.50$48.75$2 612.50$7,593.75$7,548.75You can start building a good credit history by Attending school regularly and getting good marks Getting a part-time job Buying a few things on credit and paying the bills promptly Becoming a regular customer at one store All of the above The Financial Literacy Competition Practice Questions are the sole and exclusive property of the School of Accounting and Finance (SAF) at the University of Waterloo. Access to these questions are granted exclusively to teachers who have registered for the Financial Literacy Competition and are to be used to enhance teaching in the classroom. Registered FLC teachers can make sufficient copies of the Practice Questions for their students, but copying is limited to students within the academic year. ................
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