The Consideration Element of a Contract States That ______

question 159

Multiple Choice

The consideration element of a contract states that ______.

• A) a contract must be intended to accomplish a legal purpose
• B) a contract must include a legitimate offer and a legitimate acceptance
• C) something of value must be exchanged between the two parties
• D) the parties entering into a contract must have the capacity to do so

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Definitions:

Coupon Bond

A type of bond that pays the holder interest at fixed intervals through coupons.

Par Value

The face value of a bond or stock, representing the amount that the issuing company agrees to pay at maturity or the value on which dividend payments are calculated.

Coupon Rate

The interest rate paid by a bond issuer on its nominal value, determining the periodic interest payments to bondholders.

Yield To Maturity

The total return anticipated on a bond if held until its maturity date.