Which of the Following Is Generally True About Exculpatory Clauses

question 37

Multiple Choice

Which of the following is generally true about exculpatory clauses?

• A) They are not valid with respect to intentional acts.
• B) The test is if they are reasonable in time, scope and geographic area.
• C) They are always found to be valid.
• D) They are not valid for ordinary negligence.
• E) They are never valid.

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Definitions:

Risk Averse

The preference to avoid uncertainty, referring to the behavior of investors who prefer lower returns with known risks over higher returns with unknown risks.

Risk-Free Rate

An ideal rate of return on an investment with no risk, typically represented by government bond yields.

Market Risk Premium

The increased return an investor hopes to gain by investing in a risky market portfolio rather than in assets free of risk.

Required Return

The minimum rate of return on an investment necessary to compensate the investor for the level of risk assumed.