If You Default on Your Automobile Loan

question 80

Multiple Choice

If you default on your automobile loan:

• A) an advance notice to you is required before your car is repossessed.
• B) no advance notice is required before repossession.
• C) the federal consumer credit laws give you protection from your car being repossessed.
• D) you don't have to pay the full balance due on your automobile loan.
• E) you pay fifty percent of the balance due on your automobile loan.

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Definitions:

Times Interest Earned Ratio

A financial metric that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes (EBIT) to its interest expenses.

Bonds Payable

represent long-term debt securities issued by corporations or governments, obligating the issuer to pay the bondholder the principal plus interest.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, reflecting the interest payments on its debt.

Issuing Bonds

The process by which a corporation or government raises funds by selling debt securities to investors.