Which of the Following Must Be True in Order for a Loan

question 52

Multiple Choice

Which of the following must be true in order for a loan to come within the protection of the Truth-in-Lending Act?

• A) The credit or loan must be subject to a finance charge.
• B) The credit or loan must have repayments of more than four installments.
• C) The credit or loan must have an interest rate of over 5%.
• D) The credit or loan must be subject to a finance charge, or credit or loan must have repayments of more than four installments, and the credit or loan must have an interest rate of over 5%.
• E) The credit or loan must be subject to a finance charge or have repayments of more than four installments, but there is no requirement regarding the loan having an interest rate of over 5%.

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Definitions:

Exchange Rate

Exchange rate is the value of one currency for the purpose of conversion to another, reflecting how much of one currency can be exchanged for a unit of another currency.

U.S. Investor

An individual or entity based in the United States that allocates capital in various financial assets to earn a return.

Fixed Exchange Rate

A country's currency value set and maintained as equal to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold.

Covariance

A measure of the degree to which two variables move in relation to each other.