Which of the following credit arrangements would most likely be considered a purpose credit because it is indirectly secured by margin stock?

A loan made to purchase margin stock secured by nonmargin stock
A loan made to a company for various corporate purposes, including the purchase of margin stock, secured by the corporate assets, which from time to time include margin stock; on the date of the consummation of the transaction approximately 10 percent of the assets of the company are margin stock
A loan made to purchase margin stock, guaranteed by an individual who has pledged margin stock as security for the guarantee
Bank is the trustee for a qualified pension plan from which the participants may borrow and use their interest in the plan as security; a participant borrows money for the purpose of purchasing margin stock

Answer(s): C

Under Regulation U, prior to extending credit secured by margin stock for more than $100,000, a national bank must obtain which of the following?

Certificate of value for the collateral
Written statement from the borrower as to the purpose of the loan
Written statement certifying the borrower's business address and daytime phone number
Notice from the borrower as to his willingness to provide additional margin stock as collateral

Answer(s): B

Under Regulation U, prior to extending credit secured by margin stock for more than $100,000, a national bank must obtain which of the following?

Certificate of value for the collateral
Written statement from the borrower as to the purpose of the loan
Written statement certifying the borrower's business address and daytime phone number
Notice from the borrower as to his willingness to provide additional margin stock as collateral

Answer(s): B

Under Regulation U, prior to extending credit secured by margin stock for more than $100,000, a national bank must obtain which of the following?

Certificate of value for the collateral
Written statement from the borrower as to the purpose of the loan
Written statement certifying the borrower's business address and daytime phone number
Notice from the borrower as to his willingness to provide additional margin stock as collateral

Answer(s): B

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