The CBCA States That a Promoter Acting on Behalf of a Corporation

question 4

Multiple Choice

The CBCA states that a promoter acting on behalf of a corporation before it comes into existence may avoid personal liability and waive any benefits under the contract by

• A) getting the promoter's "warranty of authority" status.
• B) including an express term that the promoter will not be bound by the agreement.
• C) making it clear to third parties that he is simply an agent for a yet to be established corporation.
• D) keeping the contract in escrow until the new corporation has been formed.
• E) ratifying the contract under the "non- existent" principal clause.

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Definitions:

Mortgage Trusts

Investment funds or trusts that pool investments in mortgage loans or mortgage-backed securities.

Construction Loans

Short-term loans provided to finance the building or renovation of a property, typically requiring interest-only payments during construction and full repayment upon completion.

Average Maturity

The weighted average of all the maturities of the bonds in a portfolio, reflecting the portfolio's sensitivity to interest rate changes.

Money Market Mutual Fund

A type of mutual fund investing in short-term debt securities, offering investors high liquidity with a relatively low level of risk.