Multiple choice

Which of the following statements is/are true?

(i) The mortgage deed is the evidence of the interest transferred to the mortgage holder. (ii) There are three parties to a mortgage. (iii) A deed of trust involves two parties. (iv) Preference shares have the advantage of a higher priority claim to the assets of a corporation in case of insolvency

  1. (i)

  2. (i) and (ii)

  3. (ii) and (iii)

  4. (i) and (iv)

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

(i) The mortgage deed is the evidence of the interest transferred to the mortgage holder. Often simply referred to as the mortgage, the mortgage deed is the document transferred to the mortgage holder.

(ii) There are two parties to a mortgage: the mortgagor (the borrower) and the mortgagee (the lender)

(iii) A deed of trust involves three parties:      (a) the trustor (the borrower)      (b) the beneficiary (the lender)      (c) the trustee. 

(iv) Preference shares, also known as preferred shares, have the advantage of a higher priority claim to the assets of a corporation in case of insolvency and receive a fixed dividend distribution. Thus, (i) and (iv) are true.