Mark Owns a Bar

question 51

Multiple Choice

Mark owns a bar.The bar has a back room where Mark has some slot machines.Mark lets some of his patrons play the machines,and Mark keeps any profits.This type of gambling is illegal where Mark lives.Mark wanted to purchase insurance in case his slot machines were confiscated by the police.Such an insurance contract would not be enforceable.Which requirement needed to form a valid insurance contract is missing?

• A)consideration
• B)offer and acceptance
• C)legal purpose
• D)competent parties

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Definitions:

Efficient Markets Hypothesis

A theory stating that asset prices fully reflect all available information, making it impossible to consistently achieve higher returns than the average market return.

Random Walk

The path of a variable whose changes are impossible to predict.

Marginal Utility

The additional satisfaction or usefulness gained from consuming one more unit of a good or service.

Risk-averse

Describes individuals or entities that prefer to avoid risk and would rather choose a certain outcome over a gamble with a potentially higher, but uncertain, return.