Mark Perez Signs a Standard Form Guarantee for a $60,000

question 87

Multiple Choice

Mark Perez signs a standard form guarantee for a $60,000 loan his brother Fred gets from a bank. Fred later incurs a credit card debt to the Bank for a further $4,500. Fred also later guarantees a loan of $5,000 from the bank to his wife, who goes bankrupt. Fred pays back $30,000 on his loan and then goes bankrupt. For what principal amount is Mark liable as a result of the guarantee?

• A)$30,000
• B)$34,500
• C)$35,000
• D)$39,500
• E)$48,000

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Definitions:

External Users

Individuals or entities outside a company who utilize its financial information, such as investors and creditors.

Separate Legal Entity

A principle acknowledging that a corporation has a separate legal existence from its shareholders, protecting them from the company's debts.

Partnership

A business owned by two or more persons associated as partners.

Labour Unions

Organizations formed by workers to protect their rights and interests, often engaging in collective bargaining with employers over wages, benefits, and working conditions.