Agency and License Law Practice Question
Question
A property manager asks how a rule affects a rental property for the Indiana Real Estate Broker Exam involving license-required activity and broker affiliation and supervision. Which answer best reduces risk? (Item 19)
Answer choices
- A. Client funds may be mixed with business funds if the broker reconciles the account later.
- B. The issue can be ignored if the parties want to close quickly.
- C. Identify acts requiring a license when performed for compensation in a way that fits Indiana exam practice.
- D. The rule applies only to commercial transactions and never to residential transactions.
Correct Answer
C. Identify acts requiring a license when performed for compensation in a way that fits Indiana exam practice.
Explanation
The correct answer is C because license-required activity requires candidates to identify acts requiring a license when performed for compensation. The Indiana reference keeps the scenario tied to state licensing practice, while the other options rely on unsafe assumptions about oral custom, escrow, client preference, independent licensee authority, or ignoring written duties.
Question details
- Difficulty: medium
- Domain: Agency and License Law
- Objective: license-required activity