Claim Dilution Arises When

question 11

Multiple Choice

Claim dilution arises when:

• A) the entity is unable to repay a loan.
• B) a lender restricts an entity from obtaining debt of a lower priority.
• C) the entity takes out a secured loan after obtaining an unsecured loan from another lender.
• D) a lender restricts an entity from obtaining debt with an earlier maturity date.

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Definitions:

Duty of Care

A legal obligation imposed on an individual requiring adherence to a standard of reasonable care while performing any acts that could foreseeably harm others.

Justifiable Reliance

Justifiable reliance is a legal concept where a party makes a decision based on another party's representation or promise, considering the decision reasonable under the circumstances.

Commits Fraud

The act of intentionally deceiving someone in order to gain an unauthorized benefit or harm another person.

Fraudulent Information

False information that is knowingly presented as true to deceive or mislead others, often for personal gain or to fulfill certain objectives.