Tiny Borrows $20,000 from First Bank

question 400

Multiple Choice

Tiny borrows $20,000 from First Bank. Mike is the surety on the loan. Tiny defaults and First Bank requires Mike to pay the balance of the loan. In this case, Mike may sue:

• A) First for violating its guarantor obligations
• B) First for defrauding him
• C) Tiny to reimburse or exonerate him
• D) Tiny to enslave himself to Mike
• E) First to exonerate him

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Definitions:

Operating Activities

Business activities related directly to the production and delivery of goods and services.

Net Income

The remaining earnings of a company following the deduction of all expenses and taxes from its total revenue.

Cash Dividends

Payments made by a company to its shareholders from its profits or reserves, representing a share of the corporate earnings.

Financing Activities

Transactions and events that affect long-term liabilities and equity of a company, including issuing debt, repaying loans, and distributing dividends.