Ramla Borrowed $100 000 from Wilhelm

question 49

Multiple Choice

Ramla borrowed $100 000 from Wilhelm.As security for repayment of that loan, she created a mortgage over a piece of land called Blackacre.Which of the following statements is TRUE?

• A)As long as Wilhelm has registered the mortgage, he has no reason to care if Ramla does not pay the property taxes on Blackacre.
• B)If the mortgage contract contains a bonus clause, then Ramla will have to pay a financial penalty if she repays the loan quicker than agreed.
• C)Because he has both personal and property rights, Wilhelm has no reason to care if Ramla does not insure Blackacre.
• D)In normal circumstances, Wilhelm has the primary duty to refrain from committing an act of waste.
• E)In normal circumstances, Wilhelm will take possession of Blackacre immediately in order to protect the value of the security.

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Definitions:

Yield

A measure often used in finance to indicate the earnings generated and realized on an investment over a particular period, expressed as a percentage of the investment's cost.

Price

The sum of money needed to buy a product, service, or property.

Coupon Bond

A bond that entitles the holder to receive a fixed interest payment (coupon) at regular intervals until maturity, at which point the principal is repaid.

Yield To Maturity

The expected overall yield on a bond when it is kept until it matures.