AD Banker Comprehensive Practice Exam

Each of the following would be an element in the definition of fraud, except:

1. A false statement on the application that is material to the acceptance of the risk

2. Withholding of known material facts

3. Intentional material misrepresentation with the intent of causing injury to another party

4. An individual warrants a fact stated on the application

The correct answer is: An individual warrants a fact stated on the application

In the context of defining fraud, elements typically include actions that involve deceit or misrepresentation that could affect the outcome of a transaction or agreement. The correct answer indicates that the statement "An individual warrants a fact stated on the application" does not inherently represent an element of fraud. This option reflects a situation where an individual may be asserting that a statement is true (i.e., warranting that the fact is accurate), but it does not involve any deceitful intention or misrepresentation. Warranting a fact signifies a guarantee of truthfulness rather than a false statement or withholding material information. In contrast, the other options describe actions that clearly involve some element of deceit or lack of transparency, which are fundamental to the concept of fraud. They include making false statements, intentionally omitting material facts, or misrepresenting information with the intent to cause harm. All these actions exhibit a deliberate intention to mislead, which is a hallmark of fraudulent behavior.