Loan practice question ..

topcat

Have to pick the most suitable option taking into account the bullet points, I think it is option 2 but the answer is option 3 I can not see why after looking for 15 minutes so maybe a fresh pair of eyes will help.

My reasoning behind option 2 is the loan is secured on the capital item where as option 3 is secured on all assets of the partnership.

Option 3 contradicts the third bullet point...

Nps

I agree. The notes say 'may not', not 'preferably not', so to my mind, option 3 is a non starter even before you get the calculator out.

topcat

Nps1976 wrote: »

I agree. The notes say 'may not', not 'preferably not', so to my mind, option 3 is a non starter even before you get the calculator out.

This one may be a mistake by AAT instead of me misunderstanding for once

Nps

I've always found the AAT stuff to be fairly reliable but on the basis of what you have copied and pasted, I still can't see how that wording can leave option 3 as an option.