In a Deed of Trust Transaction, When a Trustee Sells

question 46

Multiple Choice

In a deed of trust transaction, when a trustee sells the property and the proceeds generate a deficiency, the _____.

• A) borrower is relieved of all obligations to the lender
• B) lender may sue the borrower on the debt and recover a judgment
• C) lender may sue the trustee
• D) trustee may sue the borrower

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Definitions:

Payback Method

A capital budgeting technique that calculates the time needed to recoup the initial investment in a project.

Salvage Value

The estimated value that an asset will realize upon its sale at the end of its useful life.

Accrual Return

The return on investment that is recognized in financial statements before any cash changes hands.

Net Cash Inflows

The amount of cash received by a company from its various operational, investment, and financing activities, minus cash outflows, during a specific period.