A Principal Whose Identity Is Unknown to a Third Party

question 58

True/False

A principal whose identity is unknown to a third party who has no knowledge that the agent is acting in an agency capacity is legally known as an undisclosed principal.

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values.

Systematic Risk

The risk inherent to the entire market or market segment, which cannot be mitigated through diversification. Also known as market risk or undiversifiable risk.

Capital Asset Pricing Model

A financial model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Security's Beta

A measure of a security's volatility relative to the overall market or a specified benchmark.