John Writes Out a Check for $100 on His Account

question 48

Multiple Choice

John writes out a check for $100 on his account at the Sacred Heart Bank to repay the $100 he owes Perry.He gives the check to Eliot and tells her to hand it over to Perry.However,Eliot loses the check before she can hand it to Perry.Later,John realizes that he had not written Perry's name on the lost check.According to the provisions of the UCC,the risk of loss of the check should be placed on ________.

• A) Eliot
• B) Perry
• C) John
• D) Sacred Heart Bank

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Definitions:

Expected Utility

A theory in economics that calculates the anticipated utility of an action, factoring in all possible outcomes weighted by their probabilities.

Risk Averse

Having the tendency to prefer outcomes with lower uncertainty and potential for loss, even if they may offer lesser but more certain rewards.

Expected Utility

A theory in economics that quantifies how choices are made with uncertainty, aimed at maximizing the satisfaction or benefit.

Risk-neutral

A characteristic of individuals or entities that exhibit indifference between choices with differing levels of risk, focusing solely on expected outcomes.