2) Tippy takes out a $40,000 loan from Chase Bank to cover his law school tuitio

Question

2) Tippy takes out a $40,000 loan from Chase Bank to cover his law school tuition. He gets his sister, Pudge, to go with him to the bank. Pudge signs a guaranty agreement in which she promises to repay the loan in the event Tippy defaults. Several months later, Tippy is expelled from Fordham Law School after he is oaught cheating on his Criminal Law final exam. Tippy defaults on the loan and before pursuing Tippy, the loan officer shows up at Pudge's house demanding repayment. Is Pudge liable? a: Yes, because promises to pay for the debts of another are absolute. b: No, even it Pudge has a moral obligation to help her brother in his time of trouble. c: Yes, only after the bank tries & fails to collect from Tippy. d: Noll! 3) The Sarbanes-Oxley statute applies directly to which of the following entities? a: Gilmore's Babysitting, Inc., a personal service company in which Gilmore is the sole shareholder. b: Acme Company, a publicly traded corporation with 20 million outstanding shares. c: Tennessee Tuxedo Cbumlay, a qualified charitable organization d: All of the above are subject to the Sarbanes-Oxley rules 4) Which of the following is true of surety arrangement? a: The surety is not liable for paying the principal debtor's debt when it is due. b: The creditor should have exhausted all other remedies before seeking payment from the surety and not against the surety payment from the surety c: The creditor has the right to initiate legal actions only against the principal debtor d: The principal debtor does not have to be in default on the debt before seeking

Explanation / Answer

2.yes , only after the bank tries and fails to collect from Tippy. It is a general procedure in the bank that they try to collect the amount from the person who has got the loan.only if it fails they go to the person who has signed surety.

3.Acme company a publicly traded corporation with 20 million outstanding shares.

4.The creditor should have exhausted all other remedies before seeking payment from the surety.

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