In Which of the Following Consumer Credit Transactions Does the FTC

question 48

Multiple Choice

In which of the following consumer credit transactions does the FTC HDC rule apply?

• A)when the buyer signs a sales contract that includes a check
• B)when the buyer signs a sales contract that includes a promissory note
• C)when the buyer signs an installment sales contract that does not contain a waiver of defenses clause
• D)when the buyer arranges financing with a third-party lender

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Definitions:

Externality

A cost or benefit that affects a party who did not choose to incur that cost or benefit, often seen in environmental and public goods scenarios.

After-tax Proceeds

The net amount received after taxes are deducted from the gross proceeds of a sale or transaction.

Tax Shield

A deduction allowed by the tax laws that lowers a person's or corporation's taxable income and thus their tax liability.

Incremental Cash Flow

Those cash flows that arise solely from the asset that is being evaluated.