A 2021 study by Debthammer examined payday lending across American cities. The histogram below shows data from a sample of 30 cities on the average effective APR of payday lenders.
The histogram is only partially completed; use the data set below to complete it.
Question 24
24.
The following histogram shows data on the credit card balances of 25 people surveyed. Use it to answer questions 24 and 25.
4
10
4
10
All of these are true about late credit card payments, EXCEPT…
They can stay on your credit report for up to 7 years
They are the largest factor in your overall credit score
They are an extremely rare occurrence among American credit cardholders
They can drop your credit score by as much as 100 points
Meghan asks 4 friends for advice on how to raise her credit score, which is currently at 650. Which is the strongest piece of advice?
Open up a savings account
Pay your credit card bill on time each month
Close as many credit card accounts as you can
Pay off your debts as slowly as possible
Which of the following actions would be included in your credit report?
You made your student loan payment on time
You bought a $300 prepaid card
ou used your debit card at the grocery store
You checked your credit score on your bank’s mobile app
Struggling to pay off excess debt can lead to all of these consequences, EXCEPT…
Developing health problems from the stress of carrying debt
Having your wages reduced by collectors on unpaid debts
Being fired from your job if your employer finds out you have too much debt
Having purchases repossessed (home, vehicle, etc.) for failure to make payments
Which student is most likely to have the highest credit score?
Sarah has never had a credit card and has over $10,000 in her savings account
Kareem has 3 credit cards that they pay in full every month and recently applied for a new line of credit
Hassan has 3 credit cards with low balances and often forgets which one they need to make payments on and is late
Bekkah has 2 credit cards and they’re usually near their credit limit
All of the following statements about predatory lending are TRUE EXCEPT…
They have a federally-mandated maximum APR of 25%
They can come in many forms like high interest rates and excessive fees
They often occur in conjunction with home mortgages
They disproportionately affect communities of color
Why is it important to check your credit report regularly?
To automatically increase the credit limit on your revolving credit accounts
To monitor the transactions on your credit card
To improve your credit score through frequent hard inquiries
To identify potential errors or fraudulent activity
How is a secured credit card different from the far more typical unsecured credit card?
A secured credit card is the same as a debit card, drawing money down directly from your checking account
A secured credit card has interest rates far lower than those of a typical credit card
A secured credit card requires the borrower put down a deposit to create their credit limit
A secured credit card cannot be used to shop online, because you have to sign a receipt after every purchase
Theo reviews his credit report and decides to put a “red flag” on it. What does that mean?
Late payments will be removed from Theo’s credit report for a fee
The credit bureau has 30 days to resolve any errors in Theo’s credit report
New lenders will double-check Theo’s identity before approving a credit application
Theo will not be able to open new lines of credit for at least 1 year
What is the highest FICO credit score you can obtain?
100
650
850
1000
What is the purpose of a credit report?
To prove that you are authorized to work in the United States
To provide a free tool for you to track your finances and budget
To help lenders determine if you are a qualified candidate for credit
To compare the cost of different lines of credit
A person has a credit utilization ratio of 25% and they open a new credit card without changing their spending. Which statement correctly describes what will happen to their utilization ratio?
Utilization will go up because they are increasing their number of cards
Utilization will go up because they are increasing their credit limit
Utilization will go down because they are increasing their number of cards
Utilization will go down because they are increasing their credit limit
If a potential lender checks your credit score and finds out it is above 750, which is the most likely outcome?
You will be denied the loan
You will receive a loan with a high interest rate
You will receive a loan with a low interest rate
You will receive a loan with a low principal
Which of the following statements about wages and household American debt is true?
Wages have increased proportional to prices, and debt has remained the same
Wages have increased more than prices, and debt has decreased
Wages have increased less than prices, and debt has increased
Wages and prices have remained the same, and debt has remained the same
Which of these parties is least interested in checking your credit score?
A college admissions office
A future employer
A car dealership
An apartment leasing office
Question 16
16.
Question 17
17.
Question 18
18.
A data set with low standard deviation has…
Data points clustered close to the mean
Data points spread out far away from the mean
A skewed distribution
A large interquartile range
a
b
c
d
The histogram below shows data on rent prices for a representative sample of 500 US renters, based on the 2020 Census. All of the following statements are true, EXCEPT…
The mean rent price is higher than the median rent price
10 people reported a rent price of $2750
The median rent price is between $1000 and $1500 per month
The distribution of US rent prices is skewed to the right
Question 21
21.
Complete the 5-number summary.
Minimum: _______
First Quartile:_______
Median:_______
Third Quartile:_______
Maximum: _______
Question 22
22.
What is the Range _______ and Interquartile range_______ of the data?
Students were asked about their current student loan debt at two nearby universities. For each statement, circle the correct group.
Group 1
Group 2
Has the larger interquartile range:
Has the larger median:
Shows that 75% of respondents had more than $19,000 in debt:
Has a smaller range:
Question 25
25.
Question 26
26.
Explain your reasoning (for question 25)
Question 27
27.
Question 28
28.
Explain your reasoning (to question 27).
What is the range for this data set?
$257
$301
$592
$872
A
B
C
D
If 44 people were surveyed about their monthly car payment, how many pay between $141 and $756?
11
22
33
44
A
B
C
D
All of the following statements are true, EXCEPT…
The median is $592
The interquartile range is $301
50% of respondents pay between $756 and $1013
75% of respondents pay less than $756
A
B
C
D
True or False: The median credit card balance is greater than the mean credit card balance.
True
False
True or False: The distribution of credit card balances has high standard deviation.