If You Cosign a Loan

question 141

Multiple Choice

If you cosign a loan:

• A) you are only responsible for half of the debt obligation.
• B) you will be asked, but not required, to pay the loan if full if the borrower fails to pay.
• C) you will be required to pay the loan in full if the borrower defaults on the payments.
• D) the creditor must first try to collect from the borrower.
• E) the creditor is prohibited from garnishing your wages if you refuse to pay the loan in full.

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Definitions:

Date of Record

The specific date on which a company determines the eligible shareholders for receiving dividends or other corporate distributions.

Stock Dividend

A dividend payment made in the form of additional shares rather than cash, increasing the total number of shares owned by shareholders.

Par Value

Refers to the nominal or face value of a bond, stock, or coupon as stated by the issuer.

Prior Period Adjustments

Corrections of errors in financial statements of previous periods or adjustments due to changes in accounting policies, applied retrospectively.