Discuss American Bankers Association CTFA Exam Topic 2 Question 102

Under which of the following circumstances would it be financially beneficial to you to borrow money to buy something now and repay it with future income?

AWhen some clothes you like go on sale

BWhen the interest on the loan is greater than the interest you get on your savings

CWhen you need to buy a car to get a much better paying job

DWhen you really need a weeklong vacation

Suggested Answer: C

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20 comments · newest first

Cherrie 1 month ago

Yeah, Lily. A vacation is nice, but not essential like a job.

Huey 1 month ago

I feel like option A is just for clothes. Not worth borrowing money.

Sang 2 months ago

True, Jessie. But sometimes you have to take risks for better opportunities.

Tamera 2 months ago

But what about option B? If the loan interest is higher, it’s risky.

Yvette 2 months ago

I agree, Sophie. Investing in a car for a job is smart.

Juan 2 months ago

I think option C makes the most sense. A better job can change everything.

Leigha 2 months ago

Wait, borrowing for clothes? That seems risky...

Margo 2 months ago

D) Really? A vacation isn't worth going into debt for.

Corazon 3 months ago

C) Definitely, a good investment for future earnings!

Clorinda 3 months ago

B) No way, that's just bad math.

Micaela 3 months ago

A) Totally makes sense if you can save big!

Marva 3 months ago

Wait, borrowing for clothes? That seems risky...

Santos 3 months ago

D? Really? A vacation isn't worth going into debt for.

Jame 4 months ago

C makes total sense. A good job can pay off the loan fast!

Gerri 5 months ago

B is a no-brainer. Don't borrow if the loan interest is higher!

Tula 5 months ago

Definitely A! Sales are the best time to buy!

Magda 6 months ago

I’m torn between A and C. Buying clothes on sale sounds tempting, but I guess a car for a job is more of an investment?

Margart 6 months ago

I practiced a similar question where timing and necessity played a big role. I feel like C is definitely the best choice here.

Charlie 6 months ago

I'm not entirely sure, but I remember something about comparing loan interest rates to savings rates. Maybe B is relevant?

Sharita 6 months ago

I think option C makes the most sense since getting a better-paying job could outweigh the cost of borrowing.

American Bankers Association CTFA Exam - Topic 2 Question 102 Discussion