Which of the Following Statements Is True Regarding Duress

question 11

Multiple Choice

Which of the following statements is true regarding duress?

• A) Threats of blackmail or extortion constitute duress.
• B) The threatened party must prove that she had no reasonable alternative but to enter into the contract.
• C) A threat to not drop a frivolous civil lawsuit constitutes duress.
• D) A and B only are true.
• E) A,B,and C are all true.

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Definitions:

European Call Option

A type of call option that can only be exercised at its expiration date, not before, allowing the holder to buy the underlying asset at a predetermined price.

Underlying Asset

The financial instrument upon which a derivative's price is based, such as stocks, bonds, commodities, or currencies.

Exercise Price

The cost at which an option's possessor has the right to purchase (for a call option) or dispose of (for a put option) the base security or commodity.

Margin Requirements

The minimum amount of equity that must be maintained in a margin account to hold an investment position, set by brokerage firms or regulatory bodies.