Question:
1. Isabella and Martina are joint tenants of a commercial warehouse. What would happen if either Isabella or Martina were to die?
a.
The property would be subdivided, and each half interest would be sold by auction.
b.
The survivor would have the right to buy out the deceased owner's interest.
c.
Each interest is subject to a right of survivorship, and the rights of the deceased owner would pass to the surviving owner.
d.
The rights of the deceased owner would be inherited by the deceased's heirs.
Answer
c.
Each interest is subject to a right of survivorship, and the rights of the deceased owner would pass to the surviving owner.
Explanation
In joint tenancy, the property of the deceased owner cannot be inherited by any heirs. This means that when one tenant dies, their share is automatically passed on to the surviving tenant. In joint tenancy, each tenant has equal rights and obligations. If Martina dies, Isabella would remain as the sole owner of the commercial warehouse and vice versa. This goes on and on in joint tenancy until the last tenant dies, after which the property is passed on to probate process.
Question:
1. Which of the following is a distinguishing characteristic of an unsecured debt?
a.
the loan must be advanced within a designated period
b.
the financing arrangements are formal and deliberate
c.
the incidental feature of routineness
d.
the absence of security interest in debtor's assets
Answer
d.
the absence of security interest in debtor's assets
Explanation
Unsecured debt is a type of debt characterized by the lack of collateral requirement. A security right is defined as the legal right that is granted to a creditor or debtor over the property. In unsecured debt, the debtor is not required to offer security interest to the creditor. Unsecured debts are usually more riskier to the lender and hence do have higher interest rates compared to the secured debts.
