Which One of the Following Is Not a Danger Signal

question 27

Multiple Choice

Which one of the following is not a danger signal of potential debt problems?

• A)Paying only the minimum balance due each month
• B)Receiving second or third payment notices from creditors
• C)Using savings to pay routine bills
• D)Repaying loans faster than required
• E)Depending on overtime and moonlighting to meet everyday expenses

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Definitions:

Positive Wealth

A situation where the total value of all owned assets exceeds any liabilities, leading to a net positive financial position.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows, reflecting the cost of capital or investment risk.

Mutually Exclusive

Scenarios or occurrences that are incapable of happening simultaneously.

Average Accounting Return

A financial ratio indicating the average net income an asset is expected to generate compared to its average capital cost.