Which of the following is recommended if you loan money to a friend or relative?
A) Charge interest at a rate comparable to any high-risk security.
B) Always consider offering cash as a gift instead of extending a loan.
C) Put the agreement in writing.
D) Make the loan due within one year or less.
E) Make informal transactions for friends and relatives.

Question

Quizplus · Accepted Answer

Putting the agreement in writing helps ensure that both parties understand the terms of the loan and can prevent misunderstandings or disagreements in the future.

Which of the Following Is Recommended If You Loan Money