Fact Pattern 24-1

question 21

Multiple Choice

Fact Pattern 24-1
Petro Oil Refinery asks Quality Bank for a loan to increase its oil inventory. Quality requires Robin, Petro's president, sign a personal guaranty to pay the debt if Petro defaults. Meanwhile, to sell fifty barrels of refined oil to Slick Lubricants, Inc., Petro asks its outside accountant Tina to co-sign a credit application.
-Refer to Fact Pattern 24-1. If, after the loan agreement is signed, Slick agrees to a higher rate of interest without telling Tina, then Tina is

• A) discharged from the agreement.
• B) liable at the higher rate of interest.
• C) liable at the lower rate of interest.
• D) liable for the principal only.

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Definitions:

Indicated Atom

An atom within a molecule which is highlighted or specified for discussion or analysis.

Acrylonitrile

An organic compound that is a colorless volatile liquid, used in the manufacture of plastics, adhesives, and synthetic rubber.

σ Bonds

Single covalent bonds resulting from the head-on overlap of atomic orbitals and involving two electrons, characterized by their high strength and rotation around the bond axis.

π Bonds

Covalent bonds formed by the sideways overlap of two p-orbitals, containing a pair of electrons located above and below the axis of the bonded atoms.