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Mike Deposited $100, 000 in a Bank and Procured a Certificate

question 33

Multiple Choice

Mike deposited $100, 000 in a bank and procured a certificate of deposit on it, payable to himself, and for repayment in 5 years with a 5 percent interest rate.A year after that, Mike borrows $25, 000 from Jill, and gives her a promissory note to repay it in one year.As collateral, Mike gave Jill the certificate of deposit and asked to put in a prepayment clause to which Jill agreed.They mutually agreed that Mike could repay in monthly payments, as mentioned it in the note.
-Mike deposited $100, 000 in a bank and procured a certificate of deposit on it, payable to himself, and for repayment in 5 years with a 5 percent interest rate.A year after that, Mike borrows $25, 000 from Jill, and gives her a promissory note to repay it in one year.As collateral, Mike gave Jill the certificate of deposit and asked to put in a prepayment clause to which Jill agreed.They mutually agreed that Mike could repay in monthly payments, as mentioned it in the note. If Mike defaults on the payment even after one year, which of the following is true of the foreclosure options Jill has with the certificate of deposit Mike gave her?

Definitions:

Foot-In-The-Door Technique

A persuasion strategy where a small request is made first in order to increase the likelihood of compliance with a larger request later.

Balance Theory

A theory in social psychology suggesting that individuals strive for consistency in their beliefs, attitudes, and sentiments in relation to one another.

Assimilate

To absorb and integrate new information, cultures, or ideas into one's existing knowledge base or cultural identity.

Attitude Commitment

The degree to which an individual is psychologically attached to their attitudes or beliefs.