Pennsylvania Auctioneer Practice Exam 2026 - Free Auctioneer Practice Questions and Study Guide

An "arm's length transaction" is a transaction where the parties involved are acting independently, with no undue influence, and are fully aware of the transaction details. The four components of an "arm's length transaction" are:

1. No undue influence: This means that both parties are acting of their own free will, without any coercion or pressure from the other party.

2. Exposed: Both parties are fully informed about the transaction, including all relevant information and details.

3. Aware: Both parties have a clear understanding of the transaction, its implications, and the risks involved.

4. Unusual: The transaction is not out of the ordinary or unusual in any way and represents a fair market value exchange between the parties.

Options A, B, and D do not accurately represent the four components of an "arm's length transaction" and are therefore incorrect. Option C (No undue influence, exposed, aware, unusual) correctly lists the key components of an "arm's length transaction," making it the correct answer.