A Guarantor Is a Person Who

question 39

Multiple Choice

A guarantor is a person who:

• A) joins with the person who is primarily liable in promising to make the payment or to perform the duty.
• B) does not join in making a promise, but makes a separate promise and agrees to be liable on the happening of a certain event.
• C) is paid for serving as a surety, such as a bonding company.
• D) acts as a surety without compensation, such as a friend who cosigns a note as a favor.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock.

Treasury Stock

Treasury stock consists of shares that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Paid-In Capital

The sum of money contributed by investors through the issuance of common or preferred stocks, encompassing both the nominal value of these shares and any premium above this value.

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily reflect its market value.