5
QuizMultiple Choice

Using Credit

Question 5 • Financial Math - MA2007

Which of the following types of credits would best describe credit cards?

Answer
A
closed and secured
B
closed and unsecured
C
open and secured
D
open and unsecured

Explanation

Credit cards are open credit because you can borrow repeatedly up to a limit, repay some or all of the balance, and use the available credit again. They are unsecured because they generally do not require collateral, such as a car or home, to back the debt. Therefore, the best description is open and unsecured.

AI-written and checked against the verified answer.

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