When One Party Makes a Material Change in the Terms

question 48

Multiple Choice

When one party makes a material change in the terms of the contract without the approval of the other party, the contract is discharged by

• A) substantial performance.
• B) accord and satisfaction.
• C) alteration.
• D) waiver.

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Definitions:

European Call

A call option that can only be exercised on the expiration date, not before.

Strike Price

The Strike Price is the fixed price at which the owner of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security or commodity.

Derivative Security

A financial instrument whose value is derived from the value of another asset, known as the underlying asset.

Financial Asset

A financial asset refers to any asset that is cash, an equity instrument of another entity, or a contractual right to receive cash or another financial asset from another entity.