Power of _______ grants broad authority to act on behalf of principal in financial transactions

• A. Consent
• B. Attorney
• C. Agent
• D. Proxy

Answer: (B)

Power of attorney is a legal tool that gives someone the authority to act on the principal's behalf in financial matters. With this instrument, the person who acts—often called the attorney-in-fact—can manage bank accounts, pay bills, sign checks, handle investments, and other financial tasks. The scope can be broad or limited, and it can be durable to continue if the principal becomes incapacitated, or it can be springing, taking effect only under certain conditions. The key is that the authority is granted by the instrument itself, not merely by permission or by the person who is acting.

Consent is simply permission; it doesn’t create ongoing, formal authority to handle finances. An agent is the person who carries out tasks under the power of attorney, but the document defines the scope of that authority. A proxy is typically used for representing someone in a specific context like voting and does not usually cover broad financial transactions.