Jennifer Has Assets of $100 000 and Debts of $10

question 87

Multiple Choice

Jennifer has assets of $100 000 and debts of $10 000.She could

• A)borrow more money,since her debt ratio is low.
• B)apply for a bank loan,but expect to be turned down.
• C)borrow approximately $200 000 at below-market rates.
• D)establish an emergency fund of $10 000 in order to qualify for a loan.

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Definitions:

Loan Contract

A legal agreement that specifies the terms under which one party lends money to another.

Parent-subsidiary Relationship

A corporate structure relationship where one company (the parent) controls another company (the subsidiary) by holding a majority of its stock.

Substantive Rights

Rights that the rights holder has the practical ability to exercise.

ASIC

ASIC stands for Australian Securities and Investments Commission, a body that regulates financial markets, securities, futures, and corporations in Australia.