Agency and License Law Practice Question
Question
A broker is correcting a new licensee’s misunderstanding for the Michigan Real Estate Salesperson Exam involving fiduciary loyalty and agency and trust-money compliance. Which answer best reduces risk? (Item 202)
Answer choices
- A. The issue can be ignored if the parties want to close quickly.
- B. Put the client’s interests ahead of the licensee’s personal interest in a way that fits Michigan exam practice.
- C. The rule applies only to commercial transactions and never to residential transactions.
- D. Client funds may be mixed with business funds if the broker reconciles the account later.
Correct Answer
B. Put the client’s interests ahead of the licensee’s personal interest in a way that fits Michigan exam practice.
Explanation
The correct answer is B because fiduciary loyalty requires candidates to put the client’s interests ahead of the licensee’s personal interest. The Michigan 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: fiduciary loyalty