When the Client Is a Financial Institution, and the Loan

question 46

Multiple Choice

When the client is a financial institution, and the loan is made under normal lending conditions, which of the following loan types would be considered a violation of the independence rule?

• A) home mortgages that are a material percent of the appraised value of the property
• B) direct loans that are not material in relation to the borrower's net worth
• C) unsecured loans obtained by the member and guaranteed by her firm
• D) loans of any type, as there are no exceptions to this rule
• E) indirect loans that are not material in relation to the borrower's net worth