You Recently Had a Conversation with Your Neighbour Ruth Ripoff

question 9

Multiple Choice

You recently had a conversation with your neighbour Ruth Ripoff about her problems with getting a loan. She mentioned, in the course of the conversation, that she had been turned down at least five times. Based on this information, what can you conclude about your neighbour?

• A) Her credit history is neither positive or negative.
• B) She has either high credit balances or unpaid credit.
• C) She has not tried hard enough to secure a loan.
• D) She has an excellent credit history.

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Definitions:

Debt Securities

Financial instruments representing a loan made by an investor to a borrower, typically involving regular interest payments and the return of the original investment at maturity.

Stock Investments

Purchasing and holding shares of stock in a company with the expectation of earning a return in the form of dividends, capital gains, or both.

Common Stock

A type of security that represents ownership in a corporation, granting shareholders voting rights and a share in the company’s profits through dividends.

Equity Method Investment

An accounting technique used by firms to assess the profits earned through their investments in other companies by reporting these profits in proportion to their ownership stake.