Which of the Following Is True of Consumer Finance Companies

question 38

Multiple Choice

Which of the following is true of consumer finance companies?

• A)Consumer finance companies always charge lower rates of interest than commercial banks.
• B)Consumer finance companies make large loans to low-risk borrowers.
• C)Consumer finance companies offer consumer loans at the lowest interest rates.
• D)Consumer finance companies offer consumer loans only for home mortgage lending.
• E)Consumer finance companies make secured and unsecured (signature)loans to qualified individuals.

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Definitions:

Malpractice

Occurs when a professional accountant, health care professional, or attorney—fails to meet his or her duty of care.

Cardozo Standard

A legal principle named after Justice Benjamin Cardozo, emphasizing the importance of foreseeability and reasonable expectations in determining duty of care.

Privity

In contract law, the relationship that exists between two parties to a contract giving each a recognized interest in the subject matter of the contract so that they are bound to that contract.

Sarbanes-Oxley

A U.S. federal law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.