John and Mary Are Thinking of Buying a House

question 71

Multiple Choice

John and Mary are thinking of buying a house. They see one they like and arrange to view it. The current owner, Emelda shows them over the house stating, "I've owned this house for 20 years, and it is completely sound. There are no problems." In fact, as John and Mary discover later, the house is infested with termites. If Emelda did not know there were termites, this would be an example of:

• A) Undue influence
• B) Innocent misrepresentation
• C) Fraudulent misrepresentation
• D) Duress

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Definitions:

Compounded Annually

The process of calculating interest on both the initial principal and the accumulated interest from previous periods, applied once per year.

Ordinary General Annuity

An annuity in which payments are made at the end of each period, such as a year, month, or quarter.

Future Value

The value of an investment at a specific date in the future, considering factors such as interest rates and compounding.

Accurate To The Cent

Describing a level of precision in financial calculations where figures are exact to the smallest denomination of currency, usually a cent.