Which of the Following Is Not True of Usury Laws

question 135

Multiple Choice

Which of the following is not true of Usury laws that set maximum interest rates?

• A)They are designed to protect the consumer.
• B)They interfere with the market allocation process.
• C)They have an effect only if the market rate is higher than the legal maximum.
• D)They are analogous to a price floor.

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Definitions:

Surrenders Control

The action of relinquishing authority, power, or ownership over an entity, asset, or decision-making process to another party.

Transfer of Receivables

This refers to the process where a company assigns the right to collect cash from its outstanding invoices to another party, often in exchange for immediate cash.

Collateralized Borrowing

Borrowing funds while providing assets as security or collateral for the loan in case of default.

Restructuring Gain

Income or positive financial impact resulting from alterations made to a company’s operations, structure, or strategy aimed at improving efficiency or reducing costs.