Which of the Following Credit Arrangements Would Most Likely Be

question 18

Multiple Choice

Which of the following credit arrangements would most likely be considered a purpose credit because it is indirectly secured by margin stock?

• A) A loan made to purchase margin stock secured by nonmargin stock
• B) A loan made to a company for various corporate purposes, including the purchase of margin stock, secured by the corporate assets, which from time to time include margin stock; on the date of the consummation of the transaction approximately 10 percent of the assets of the company are margin stock
• C) A loan made to purchase margin stock, guaranteed by an individual who has pledged margin stock as security for the guarantee
• D) Bank is the trustee for a qualified pension plan from which the participants may borrow and use their interest in the plan as security; a participant borrows money for the purpose of purchasing margin stock

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Definitions:

Durkheim

A foundational sociologist who explored the complex relationship between individuals and society, emphasizing the importance of social norms and values.

Dramaturgical Perspective

An approach in sociology that depicts human interaction as theatrical performances where individuals are actors playing roles.

Impression Management

A process by which people attempt to control how others perceive them.

Cohesiveness

The degree to which members of a group or organization are united in their pursuit of common goals and exhibit loyalty to each other.